Panama, officially known as the Republic of Panama, is a country located in Central America, bordered by Costa Rica to the west and Colombia to the southeast. It is a narrow, isthmus-shaped country that connects North and South America and is home to the Panama Canal, one of the world's most important shipping routes. Panama has a population of approximately 4.3 million people and a rich history dating back to pre-Columbian times.
Recent Significant Economic Developments
Panama's economy has experienced significant growth in recent years, driven by the expansion of the Panama Canal, tourism, and financial services. The country has also benefited from its strategic location as a hub for international trade and investment. In 2023, Panama's GDP grew by an estimated 5.6%, making it one of the fastest-growing economies in Latin America. The growth was primarily driven by the services sector, which accounts for over 70% of GDP.
Latest Adjustments to Tax Legislation
In 2023, Panama introduced several changes to its tax legislation, including:
- Law 122 of 2023: This law introduced a new tax on digital services, which applies to non-resident companies that provide digital services to Panamanian consumers. The tax rate is 1% of gross revenue.
- Law 123 of 2023: This law amended the Income Tax Law to provide tax incentives for companies that invest in research and development. The incentives include a tax credit of up to 10% of eligible expenses.
- Law 124 of 2023: This law amended the Tax Code to simplify the process of filing tax returns and paying taxes. The changes include the introduction of a new online tax filing system.
These changes are part of Panama's efforts to modernize its tax system and make it more competitive. They are expected to have a positive impact on the country's economy by encouraging investment and innovation.
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