Digital Taxes in Panama 2025

Los digital taxes are rates applied to revenues generated by technology companies that provide digital goods or services, such as Netflix, Uber and Amazon. These taxes seek to ensure that these companies, many of them foreign, contribute to the local economy of the countries where they operate. In an increasingly interconnected world, its regulation is essential for:

• Ensure fiscal fairness: Ensure that both local and foreign companies contribute to the country's tax system.
• Combating tax avoidance: Prevent large multinationals from taking advantage of legal loopholes to reduce their tax liability.
• Increase public revenues: Generate additional resources to finance key sectors such as health and education.

In Panama, this regulation acquires relevance due to the growing consumption of foreign digital services and the country's strategic role as a business hub.

In Panama, the discussion of digital taxes has revolved around Bill 229, presented in 2019. This project proposes to tax profits generated by foreign technology companies under the Movable Property and Services Transfer Tax (ITBMS) And the income tax. However, its implementation has faced significant challenges:

• Lack of political consensus: The regulation is still in a legislative phase, without clear evidence of its implementation.
• Technical complexity: Taxing companies that do not have a physical presence in the country remains a challenge.
• Regional Competition: Panama seeks to avoid measures that reduce its attractiveness as a business destination.

Currently, the digital tax scheme is still under development, with no clear date for its definitive implementation.

Several Latin American countries have already taken concrete steps to regulate digital taxes, serving as an inspiration for Panama:

• Argentine: Applied the Digital VAT to platforms such as Spotify and Uber, collecting taxes through credit cards of their end users.
• Chile: Taxed foreign digital services with a fixed percentage of VAT, simplifying their collection.
• Colombia: Introduced a mixed model that covers VAT and income tax for technology companies.
• Mexico: Requires platforms to collect and transfer taxes to the government.

Panama could benefit from studying these cases, adapting them to the particularities of its tax system and service-based economy.

The Panamanian government seeks to implement a digital tax model that combines elements of the ITBMS and income tax. This would include:

• A fixed rate for foreign digital services based on their revenues generated in Panama.
• Increased regulation of technology platforms: Ensure that companies like Netflix and Airbnb comply with the country's tax regulations.
• Adoption of technology to track and collect taxes efficiently.

Although the proposals are promising, their implementation will depend significantly on legislative agreements and international partnerships.

The implementation of digital taxes in Panama will affect several sectors:

• Technology companies: They must comply with new regulations and declare income according to Panamanian regulations.
• Consumers: They could face higher prices due to the transfer of the cost of taxes to end users.
• Local businesses: They could benefit from greater fiscal equity vis-a-vis their international competitors.

It is crucial that both companies and citizens stay informed to adapt to these changes and minimize their impact.