|Dividend Tax (Supplementary Tax)|
Any legal entity that requires the notice of operations is required to withhold 10% of the sums it distributes to its shareholders or partners of subsidiaries when they are of Panamanian origin and 5% in the case of foreign source income, foreign or export.
Same tax treatment but of 5% will have the revenues from the international maritime trade, the interests that are recognized product of accounts of savings, in installments or of any nature that is maintained in banks established in the Republic of Panama. In addition, 5% of the sums received or accrued by persons abroad will be taxed as royalties from persons located in the Colon Free Zone.
In the distribution of dividends will prevail the regime established by international treaties and before dividing foreign source dividends in order of priority the dividends of Panamanian income must be distributed as a priority over exports.
Bearer shares tax 20% on the same balance used in the bases of 5% and 10% respectively.
The companies that are constituted as foreign branches that are extensions of foreign entities tax 10% on the 100% of the net taxable income.
The settlement of the tax will be within the first ten (10) days after the withholding is made once the dividend or participation fee has been declared.
According to the dividend tax, the complementary tax is an advance to the latter which is paid if the profits are not distributed in the same fiscal period that are generated or are distributed the profits in the same fiscal period were not within the established levels By legislation.
If the distribution of dividends is greater than 40%, the dividend tax corresponding to 10% or 20% will be settled if they are registered or bearer shares respectively.
In the event that there is no distribution of dividends or that the total amount distributed as a dividend or participation fee is less than forty percent (40%) of the net income of the corresponding fiscal period, less the tax paid by the Legal person, this must cover 10% of the difference.
For those operations of dividend distribution that are of Panamanian source will be 10% on the 40% of the taxable income. And for the effects of foreign operations, exports and foreign source income will be 10% over 20% of taxable income.
Any loan or credit that the company grants to its shareholders must pay a 10% dividend tax, including cases in which the dividend tax is 5%. In cases where the previous withholding of the 10% dividend tax has been made, this tax will be understood to have been caused and settled. In cases where only 5% has been withheld, the company shall withhold an additional 5% to complete the 10% required for the dividend tax in the cases contained in this paragraph. Bearer shares are excluded, which must retain 20% as dividends, before being loaned to the bearer shareholder.
The dividends or participation quotas distributed and corresponding to registered preferred shares are excluded from the payment of income tax, provided that their maturity is not more than five years, which do not form part of the capital, in accordance with the Information Standards Which belong to owners of common shares of the issuing company, accrue a yield of not more than 6% per annum, that are not transferable and that the issues of such preferred shares do not exceed 40% of equity.