The new “Tax Reform Law” (Law 119, Spanish Only .pdf file) that is now the law of the land (enacted march 15th, 2010) has greatly effected the tax due on all Panama car imports.
One of the biggest changes was the elimination of the tax exception for retirees who are now called to pay regular importation taxes on all cars they may bring in Panama.
This is a big blow to all retirees who, among other benefits, were counting on the tax exception to be able to bring their cars with them in Panama. I am not sure at this point (and I doubt if any authorities are too) if this new import tax is applied from March 15 on or it covers all retirees who got their status before March 15th.
Regardless of what the case may be, here is what the new car import tax valuation is:
- All passenger cars (sedans, SUV etc), regardless of class must pay:
- 15% tax if their value is less than $8,000
– 18% tax if their value is between $8,000 and $20,000
– 23% tax if their value is between $20,000 and $25,000
- 25% tax if their value is more than $25,000
- Electric and hybrid cars pay 0% tax until December 31st, 2012 and 5% thereafter.
- commercial Vehicles (fleet) pay 12% tax
- Cargo vehicles pay 10% tax
- Public transport vehicles pay 10% tax
- Motorcycles greater than 125cc, outboard motors greater than 75cc, yachts, aquatic vehicles (jet-skis), and boats pay 10% tax
There is also a minimum tax applied depending on the age of the car as follows:
- $750 if older than 12 months
- $1,000 if older than 24 months
- $1,500 if older than 36 months
Of course, on top of all of the above a 7% ITBMS (Goods and Services Tax) is also applied.
All the above % are applied to the value of the vehicle as defined by Panama Customs and not Blue Book or any other market reference guide. The valuation process of Panama Customs is very long and tedious and beyond the scope of this post.
You can get a more detailed explanation of the valuation process and the general car importation process on this online Panama Guide.
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