PANAMA: APPLICATIONS FOR RULINGS ON APPLICATION OF TREATY BENEFITS

A resolution was published in Panama’s official gazette in early August 2015 that provides rules concerning benefits under income tax treaties for the avoidance of double taxation. Specifically, under this new guidance, taxpayers can seek a ruling from the tax authorities as to whether treaty benefits will apply to a specific transaction.

Interested parties or persons responsible for paying taxes have 30 days before entering into a transaction to submit an application with Panama’s tax authorities for a ruling on the application of the income tax treaty provisions to that transaction. If the ruling request is denied, the domestic tax law of Panama will apply to the transaction.

The resolution (Resolution No. 201-12083 of 29 July 2015, and published in the official gazette on 6 August 2015) includes definitions of terms; sets forth what information must be included in the ruling from the tax authorities as well as the legal basis for the ruling; addresses recurring transactions; outlines the format for ruling requests, and other information.

Read an August 2015 report (English) [PDF 300 KB] (Spanish) [PDF 216 KB] prepared by the KPMG member firm in Panama: Application of benefits of conventions to avoid international double taxation