Incentives in the Panamanian Registry

 

Article 22. The payment of the registration rate (fee) to which reference is made in Article 2 of Law 4 of 1983, subrogated by Article 2 of Law 19 of 1992, will be applied the following discounts when groups of vessels shall register, in conformance with the following scale (levels):

a) Group of vessels representing 50,000 GRT (GROSS REGISTERED TONS) to 100,000 GRT, up to twenty percent (20%)
b) Group of vessels representing more than 100,000 GRT, up to fifty percent (50%).

In the same manner, when dealing with the registration of one vessel alone, whose GRT is more than 100,000 GRT, a discount of up to fifty percent (50%) of the registration rate (fee) may be granted, for which the General Consular and Vessels Office of the Ministry of the Treasury (“Dirección General Consular y de Naves del Ministerio de Hacienda y Tesoro”), shall issue a motivated (justified) resolution and shall take into account the type of vessel, the year of its construction and the antecedents (background information) of the owner with the Panamanian Registry (“Registro panameño”).

For the purposes of the application of sections a, b, and c of this article, the General Consular and Vessels Office of the Ministry of the Treasury (“Dirección General Consular y de Naves del Ministerio de Hacienda y Tesoro”) shall issue a motivated (justified) resolution through which it shall grant said discounts.

PARAGRAPH 1. For the purposes of this article, a minimum of three (3) vessels shall be considered as a group of vessels, which must belong to the same person or to various persons constituting or forming part of the same financial (economic) association (group). The same financial group shall be understood to exist if the requesting parties make it known that they are the subsidiaries of one same person or that they are affiliated amongst themselves given that the entity in question is their common property, or either directly or indirectly it is the property of a third party, or else, given the fact that they are subject to its administrative (managerial) control.
Said relationship or common control shall be presumed to exist when the third person on which the link of property or administrative (managerial) control rests, is entitled, either directly or indirectly, to a minimum of twenty percent (20%) of the capital of the subsidiaries or affiliates or to the majority of votes in their administrative (managerial) bodies, which shall be proven, prima facie, by means of a sworn declaration of a representative of the interested parties before a Notary Public.

PARAGRAPH 2. When dealing with groups of vessels representing more than 100,000 GRT, an additional discount of up to fifty percent (50%) over the annual tax may be granted.

PARAGRAPH 3. The General Director of the General Consular and Vessels Office of the Ministry of the Treasury (“Dirección General Consular y de Naves del Ministerio de Hacienda y Tesoro”), may recognize to the groups of vessels representing more than 100,000 GRT, the rights they may have paid for their previous registration, corresponding to the tax period in force (valid) in the Republic of Panama, to apply them to the Panamanian Registry (“Registro panameño”), for the period of their first year of registration (“abanderamiento”), as long as their permanency in the Panamanian Maritime Registry (“Registro Marítimo panameño”) is guaranteed for a term of four (4) years.

Article 23. In special cases when owners and/or ship builders (ship owners) maintain groups of vessels registered with the National Merchant Fleet (“Marina Mercante Nacional”), the General Director of the General Consular and Vessels Office of the Ministry of the Treasury (“Dirección General Consular y de Naves del Ministerio de Hacienda y Tesoro”), may allow the payment, without over charges, and in special installments, of the taxes, annual rates (fees) and other obligations, that the vessels already registered in the Panamanian Registry (“Registro panameño”) must fulfill, as long as they comply with the following requirements:
1) That the vessels belong to the same ship builder (ship owner) or financial (economic) association (group).
2) That the group of vessels belonging to the same ship builder (ship owner) or financial (economic) association (group) be larger than fifteen (15) vessels or that they represent a tonnage surpassing 500,000 GRT.
3) That the special period of time to comply with the payment of the taxes, annual rates (fees) and other tax obligations, shall not exceed the respective tax period.

Article 24. The General Director of the General Consular and Vessels Office of the Ministry of the Treasury (“Dirección General Consular y de Naves del Ministerio de Hacienda y Tesoro”), may agree to payment arrangements for the delinquent debts (accounts) that the vessels registered in the Panamanian Registry (“Registro panameño”) may have pending with the National Treasury, as long as the period of time granted does not exceed one (1) year, to be counted from the moment the payment arrangement is signed (by the parties).

Article 25. This Law amends Articles 26-C, 446, 486-A, 491, 523, 525, 575, 583, 741; the first paragraph of section number 9 of Article 764; Articles 1057-A, 1057-B and 1057-D of the Tax Code; section number 2 of Article 1 of Law 35 of 1963; paragraph g of Article 2 of Law 63 of 1973, article 58 of Law 30 of 1984; Article 2 of Law 5 of 1988; and Article 10 of Cabinet Decree (No.) 75 of 1990. It adds paragraph k to Article 701 and paragraph 3 to section 11 of Article 764 of the Tax Code; sections 3 and 4 of Article 1, Article 1-A to Law 35 of 1963; and derogates Articles 447, 452, 453, 455, 456, 459, 477, 478, 479, 486, 487, 488, 492 and 496 of the Tax Code as of January 1st, 1996.

Article 26. This Law will become valid starting at the time it is promulgated, with the exception of Articles 2, 3, 4, 5, 6, 7 and 8, which shall become valid as of January 1st, 1996.

HAVE IT COMMUNICATED AND COMPLIED WITH.

Given in Panama City, on the 20th day of the month of June of nineteen hundred and ninety-five.

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