Panama: Tax treaty with Vietnam, agreement with Japan | KPMG | VN

Panama: Tax treaty with Vietnam, information exchange agreement with Japan

Panama: Tax treaty with Vietnam, agreement with Japan

Panama’s national assembly (Asamblea Nacional de Panamá) has ratified two tax-related agreements—an income tax treaty with Vietnam, and a tax information exchange agreement with Japan.

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The income tax treaty with Vietnam (as signed in August 2016 and ratified in February 2017) includes:

  • Withholding tax rates on dividends of 5% or 12.5%, on interest at 10%, and on royalties at 10%
  • Income from agricultural or forestry activities to be categorized as real estate income
  • Requirements for a permanent establishment such as it may be established through an agent or representative, for a minimum period of six months
  • Effective date measures—beginning the first day of January following the calendar year in which the treaty enters into force (which could be 1 January 2018, provided Vietnam ratifies the treaty at some point in 2017)

The agreement with Japan for the exchange of information was also ratified in February 2017, and it applies to taxes of any kind and description including municipal taxes, for which there is no reservation or exclusion.

 

Read a March 2017 report (Spanish) prepared by the KPMG member firm in Panama

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