Panama’s Law 8 of 1994 aims to develop tourism activities in the country through simple and quick processes. Likewise, it seeks to provide incentives and benefits to people engaged in tourism activities. It also seeks to adopt mechanisms necessary to achieve the coordination of the action of the public and private sectors in the tourism area to promote tourism in Panama.
Some benefits and incentives for tourism companies
The benefits and incentives vary depending on the tourism sector, however, these are some of those mentioned in the law:
For lodging services:
- Exemption from taxes such as import tax, contribution, levy or duties of any denomination or kind, real estate tax for 20 years, taxes or levies on its capital for the term of development of the activity, wharfage taxes, and landing fees on docks, airports or heliports of its property built or rehabilitated by the company, for the term of development of the activity.
- Exemption of the Income Tax caused by the interest earned by the creditors in this type of activity.
- 10% rate of depreciation of real estate per year, excluding the value of the land.
For investments in Historic Monumental Ensembles:
- The total deductibility of the amount invested in restoration, maintenance, and the illumination of Historic Monumental Ensembles is recognized.
- Exemption of real estate tax for 10 years on the land and 30 years on the improvements, income tax during the first 5 years of activity and thereafter for the following 5 years may deduct as an expense the losses incurred during the 3 fiscal years following the fiscal period in which such losses occurred.
For the filming of feature films, artistic or sporting events:
- Exoneration of income tax on the profits of the event, except when the tax paid in Panama is considered a tax credit in the country where the company comes from. Exoneration of any national tax that regulates the event, income tax on the income of national and foreign athletes and artists that participate in the events.
For tourist yachts visiting the ports of Panama and whose stay does not exceed 90 days:
- Exoneration of the payment of any kind of fees, taxes, and services, in the concept of arrival and anchorage.
Natural or juridical persons that wish to be under the incentives referred to in the law must be registered in the National Tourism Registry.
To read the law 8 of 1994 that promotes tourism activities in Panama and other incentives and benefits see here: