CHAPTER II ( TOURIST ACTIVITIES)
Article 5. The incentives and benefits provided under this Law are available to natural persons or companies engaged in tourist activities as defined herein, who are registered at the National Registry of Tourism (Registro Nacional de Turismo).
Article 6. For the purposes of this Law, tourist promotion and development activities are understood to mean those that effectively contribute to increase of foreign visitors to the Republic of Panama and the diversification of tourist offerings in the country, as well as any investment in activities that encourage such an increase in the number of visitors, to with
The construction, furnishing, renovation and operation of hotels, motels, apartment hotels, boardinghouse, inns, bed and breakfasts, buildings under the horizontal property regime that are destined entirelyto public tourist lodging, wether managed by their co-owners or by third parties, tourist time-share quarters, cabins, camping sites for the exploitation of ecotourism, and theme parks.
Construction, furnishing, the building of access infrastructures, renovation, and operation of convention centers, shops for native crafts of tourist interest, recreational parks, zoos, tourist resorts, ecotourism, and marinas.
Land, air, and maritime transportation for passengers within the Republic of Panama, mainly for tourist.
Construction, furnishing and operation of restaurants, discotheques, and nightclubs catering to tourists.
Construction, renovation, restoration, remodeling, and expansion of any real property for commercial or residential use at Historic Landmarks where these types of activities are authorized. The National Bureau of Historic Oatrimony (Dirección Nacional de Patrimonio Histórico) of the Panama National Institute of Culture (Instituto Nacional de Cultura) shall be the agency in charge of authorizing and regulating all matters pertaining to any project performed to preserve the historic value of such landmarks.
The operation of tourist agencies handling incoming tourism; devoted entirely to such an activity.
Any company producing feature films and international artistic or sports events to be broadcast over closed circuit television or abroad by satellite, that include spot promoting tourism in the Republic of Panama prior to, during, or after such events.
Any investment in the desing, restoration, construction, maintenance, and lighting of historic landmarks, municipal parks, national parks, or any other public area under the direction of the Panama Institute of Tourism (Instituto Panameño de Turismo - IPAT), in coordination with the National Institute of Culture (Instituto Nacional de Cultura - INAC).
Article 7. The right to claim benefits under this Law is recognized upon registration of a company at the National Registry of Tourism (Registro Nacional de Turismo), and the issuance of a certification by the Panama Government Tourism Bureau (Instituto Panameño de Turismo-IPAT), specifying the rights and duties of the party entitled to such benefits.
CHAPTER III ( INCENTIVES AND BENEFITS)
Article 8. For the purpose of ecounraging investment in new projects and activities to offer tourist facilit ies, the following tax incentives are granted to natural persons or companies covered by the provisions of this Law. (Modified by the Decree Law No.4 / February 19, 1998)
Public Tourist Lodging: The following incentives are granted for the construction, furnishing, and efficient development of the public lodging establishments covered by Article 6, 1, of this Law, in which a minimum, not including the cost of the land, of three hundred thousand balboas (US$50,000.00) if they are located in the rest of the Republic of Panama, except in the case of inns and bed and breakfast, for which the minimum investment shall be set by IPAT.
A twenty- (20) year, full exoneration from import duties, contributions, taxes, or fees of any type or class, for the introduction into Panama of any materials, appliances, furniture, equipment, vessels, and automotive vehicles with a minimum capacity of eight (8) pasengers. The latter must be certified by IPAT as indispensable for the regular consuct of tourist activities. These materials and equipment must be used to build and furnish public lodging establishments. This incentives shall be granted provided these items are not produced locally in sufficient quantity or of the proper quality. Any equipment a company may bring into Panama for the purpose of
saving energy or providing the necessary safety at the project area shall also be exonerated. In the case of ecotourism activities covered by Article 6 of this Law, the exoneration of four-wheel traction vehicles with a minimum capacity of five (5) passengers shall be allowed.
A twenty (20) years exoneration from real property tax, starting on the date of registration of the company at the National Registry of Tourism (Registro Nacional de Turismo). This exoneration shall cover all real property owned by the company, provided it is used in its entirety for tourist activities.
Exoneration from any tax or assessment on its capital.
Exoneration from warfare or any fee for landing on piers, airports, or heliports owned, built, or repaired by the company. The Government of Panama may use these facilities free of charge.
Exemption from payment of income tax on any interest earned by creditors in operations for investing in public lodging establishments.
An annual rate of ten per cent (10%) shall be for allowed real property depreciation, not including the cost of the land.
Investment in Historic Landmarks:
The following incentives are granted for the activities contemplated in Article 6, 5 of this Law located within Historic Landmarks, for which the National Institute of Culture (Instituto Nacional de Cultura-INAC) authorizes the construction of projects with a minimum investment of one hundred thousand dollars (US$100,000.00), not including the cost of the land.
A ten (10) years exoneration from real property tax on the land, and thirty (30) years exoneration for improvements to real property.
Exoneration from income tax on the company 's profits during the first five (5) years of operation of the appropriate commercial activity. After this period expires, the company may deduct any losses as expenses during the first three (3) fiscal years following the fiscal year in which such losses were sustained.
A one time exoneration from import duties on any equipment and materials used in construction, remodeling, and furnishing, provided such items are not produced locally in sufficient quantity or of the proper quality, and that they are not for sale to the general public.