Panama approves a tax bill on cryptos
National Assembly of Panama approved a bill 697 ("Crypto Law") with 38 votes in favor and none against on 28 April 2022 to regulate cryptocurrencies in the country. Crypto Law enables the canal country compatible with the digital economy, the blockchain and Cryptopians. Crypto Law contains provisions on the taxation of Cryptocurrency offering favourable treatment for people who move there for tax residence purpose. Let's check what they offer.
- Capital gain is taxed at 4% rate on gains derived from the disposal of crypto assets with underlying assets invested economically in Panama and not constituting an ordinary course of business
- Gains obtained from the sale or disposal for consideration of crypto assets with underlying value will be calculated by subtracting the acquisition cost from the sale price
- Alienation (sale or disposal) of crypto assets is not considered when they are used as means of payment for the acquisition of services or goods, with the exception of crypto-assets, bonds, shares and other securities issued by legal persons
- Transfer of a crypto asset is exempt from VAT
- Public institutions are enabled to receive payments of taxes, fess, and other tax obligations in crypto assets. The tax administration will issue a regulation determining which crypto assets may be received by them
What they are offering is very attractive indeed. 4% capital gain tax is extremely low in global standard, and you can further save the tax by paying for goods, services and even tax bills in cryptos. Besides, it is relatively easy for foreigners to obtain residence visas and move their tax residence to this crypto-friendly country.
Good news for Cryptopians!