‘Panama Cannot Continue to be a Haven for Shell Companies’: Gaitán
The president of the National Assembly’s Economy and Finance Commission, Eduardo Gaitán, maintains that the reform to the Tax Code that incorporates economic substance will help improve Panama’s reputation.
Panama closes the door on shell and paper companies with the approval of Law 526, which reformed the Tax Code and incorporates the requirement of economic substance for multinational groups to demonstrate real activity in the country or else they will pay 15% tax. Gaitán acknowledges that taking on this reform, initially proposed by the Ministry of Economy and Finance, was a monumental task. It involved not only consolidating into a single project a large portion of the observations and proposals from more than 35 trade associations and some 150 individuals who participated in the debate, but also represented a personal challenge: studying international taxation, European Union regulations, and the complex web of tax evasion by shell companies that used Panama as a haven without providing any real benefit to the country.
