Panama’s Cabinet Council approved sending Bill 30-26 to the National Assembly for consideration. The bill amends and supplements provisions of the Tax Code related to the taxation of certain digital economy transactions and establishes other provisions.
Panama’s Cabinet Council announced, on 19 August 2026, that it approved sending Bill 30-26 to the National Assembly for consideration. This bill amends and supplements provisions of the Tax Code related to the taxation of certain digital economy transactions and establishes other provisions.
The bill aims to update the Transfer Tax on Tangible Personal Property and Services (ITBMS) regime in light of new production, marketing, intermediation, and service provision methods that are carried out through digital platforms, applications, and other digital means.
This legislative initiative does not establish a new tax category but rather updates and expands the scope of the ITBMS to cover certain transactions inherent to the digital economy. It adapts the rules of territoriality, determination, compliance, and collection of the tax to these new methods of providing goods and services.
Criteria for determining digital transactions
Objective criteria are incorporated to identify when digital goods or services are used, consumed, or utilised within the national territory. These include elements such as the location of the bank account or payment instrument used, the billing address, the internet protocol address, the SIM card’s country code, and other indicators reasonably linked to the user’s location.
Furthermore, the bill includes safeguards designed to prevent the update to the tax regime applicable to the digital economy from having unforeseen effects on financial activities that, by their nature, are subject to different legal and regulatory treatment.
Modernising the tax system
Modernising the tax system in the face of the digital economy is a necessity to preserve fairness among the various market participants, strengthen the State’s revenue-raising capacity, reduce areas of erosion of the tax base, and adapt national legislation to constantly evolving economic models.
