Tax exemption driving volume on Panama Exchange

Volume in the Panama Stock Exchange is being driven by the fact that properly registered shares and bonds do not pay income tax.

Capital.com.pa reports that "the stock market in Panama traded $512.2 million in January 2013, a figure much higher than that in the months of January in the last seven years, with the exception of 2011 ".

The explanation for the increase "has to do with many factors, but one of them is still the benefit of tax exemptions received by equity investments."

Ruben Bustamante president of the firm BDO said that "one of the benefits you get when you invest in the domestic capital market is that the profit from the sale of shares of companies registered with the Superintendency of Securities Market (SMV), generates no income tax, no tax on dividends nor complementary tax.

"At the same time, if the instrument or value is registered in the VPS, the interest that is paid incurs only 5% for income tax, however, if it is paid via the Stock Exchange, such interest would be exempt from Income Tax", saidthe accountant.