Nice Live Inn Panama

Archive for October, 2009

Agriculture
For centuries, agriculture was the dominant economic activity for most of Panama’s population. After construction of the Panama Canal, agriculture declined; its share of GDP fell from 29 percent in 1950 to just over 9 percent in 1985. Currently, agriculture and fisheries comprise 7.4% of the country’s GDP. Panama is a net food importer and the U.S. by far, is its main supplier. Though for many years, Panamanian agriculture remained poorly conditioned, after the 1970s, agriculture became mechanized as industrialization became more intensified.

Taxation
Taxation in Panama, which is governed by the Fiscal Code, is on a territorial basis; this is to say, that taxes apply only to income or gains derived through business carried on in Panama itself. The existence of a sales or administration office in Panama, or the re-invoicing of external transactions at a profit, does not of itself give rise to taxation if the underlying transactions take place outside Panama. Dividends paid out of such earnings are free of taxation.
In February, 2005, Panama¡¯s unicameral legislature approved a major fiscal reform package in order to raise revenues from new business taxes, and reduce the country¡¯s level of debt. The legislature voted 46 to 28 in favour of the measures, which include a new 1.4% tax on companies¡¯ gross revenues, and a 1% levy on firms operating in the Colon Free Trade Zone ¨C the largest free port in the Americas.
In July, 2005, all firms which prior to 2005 were exempt from value added tax in Panama are affected by a new interpretation of the country’s Tax Code by the tax authorities. In a little publicised move, Panama¡¯s Revenue Office circulated a series of opinions which stated that the recent tax reform has abolished all VAT exemptions and special treatment given prior to February 2005.

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