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Research by Country/Region January 18, 2018  
PANAMA: CUSTOMS, TAXES, and DOCUMENTATION REQUIREMENTS: IT PRODUCTS and SERVICES IMPORTS

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A. Is this country a member of the Information Technology Agreement?

B. Customs documentation requirements for IT products

C. Software: duties and taxes, updates, licenses, electronically delivered

D. IT services: tax treatment and other regulations

E. Refurbished, used, or repaired computer equipment imports


A. IS THIS COUNTRY A MEMBER OF THE INFORMATION TECHNOLOGY AGREEMENT?
YES. However, Panama has not completed all the requirements to fully join the ITA, therefore has no timetable to reduce inport duties to zero.
Signatories to the Information Technology Agreement (ITA) have eliminated their import duties on a wide range of information technology products, including software and computer hardware. For more information on the ITA, and exact tariff elimination schedules of signatories, click here.
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B. CUSTOMS DOCUMENTATION REQUIREMENTS FOR IT PRODUCTS

What are the documentation requirements for the physical import of software? For other information technology products?
The documentation required for the import of software includes the Commercial Invoice and Airway Bill.
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C. SOFTWARE: DUTIES and TAXES, UPDATES, LICENSES, ELECTRONICALLY DELIVERED

DUTIES AND TAXES ON SOFTWARE IMPORTS

Are duties assessed on the intellectual property of the software or on the medium on which is it presented?
Duties are assessed on the intellectual property of the software. Duties are levied on the declared value of the software. Import duties are: 5% over the CIF value on general software and 15% over the CIF value on entertainment software.

Are taxes assessed on the intellectual property of the software or on the medium on which is it presented?
Taxes are assessed on the intellectual property of the software. Taxes are levied on the declared value of the software. A 5% Value Added Tax is levied over the CIF value plus the import duty, on all software

Is customized software treated differently than packaged software?
Customized software is treated the same as packaged software.
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IMPORTS OF SOFTWARE UPDATES

What are the customs duties and tax implications for software sold with updates when the full sales price, including cost of updates, is shown on the original commercial invoice? Are duties and taxes paid on that amount? What happens when the updates are sent at a later date? Are duties/taxes applied again? If so, based on what value? How should information presented on the commercial invoice for the original and subsequent shipments to avoid paying duties/taxes more than once on a single sale?
When updates are shipped, duties/taxes will be charged again. For the Customs office it is difficult to distinguish updates from original software. One way to avoid the duty being charged twice can be marking the product with a "non-commercial value" label. However, it will be subject to the Customs office's decision.
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SOFTWARE LICENSES: CUSTOMS CLASSIFICATION, IMPORT DUTIES, TAXES, OTHER

Are software licenses classified in Harmonized System 4907?
Software licenses are classified in the Harmonized System (85249931 and 85249932).

Are import duties/taxes applied? If so, on what cost/price base are they levied?
The Customs office has no way to assess duties on software licences, unless it the license is included in the commercial invoice at the time the software enters the country.

Are withholding or other additional taxes applied on software licenses? If yes, how?

If a U.S. license agreement is included in the packaging or is part of the installation/registration of shrink-wrapped software imported from the United States, would that agreement be binding on consumers in your market? If so, would U.S. or local laws pertain?
The enclosed License Agreement in the packaging is binding on consumers in the Panamanian market. Local laws pertain.
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SOFTWARE DELIVERED OVER THE INTERNET/ELECTRONICALLY DELIVERED SOFTWARE

Are taxes applied to software delivered to the end-user over the Internet? If so, on what value?
No import taxes are applied to software delivered to end-users over the Internet.

Would the situation be different if this software were instead delivered to a distributor who has a license to produce (replicate) and sell the software?
The same situation applies if the software is delivered to a distributor with a license to replicate the software.

What are the documentation requirements for the electronically delivered import of digitized products (i.e. software, movie downloads) over the Internet or other networks?
N/A

Must an electronically delivered software import be accompanied by a physical shipment of the same product?
Panama has no special requirements on electronically delivered software.
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D. IT SERVICES: TAX TREATMENT AND OTHER REGULATIONS

Are services (i.e. training, set-up, etc) relating to the sale of software taxed? If so, at what rate and based on what value?
Services will be taxed if they are part of the original price at the same rate of the software.

Are U.S. IT solution providers permitted to send personnel into the country to set up hardware/software-related systems?
U.S. personnel are allowed to travel to Panama to set up hardware/software.

Are special visa, work permits, and/or professional certification by an accredited body required?
No special visas/certifications are required.
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E. REFURBISHED, USED, OR REPAIRED COMPUTER EQUIPMENT IMPORTS

1. REFURBISHED COMPUTER EQUIPMENT
Is the import of refurbished computer hardware, parts, and accessories (including toner cartridges) permitted?
Importation of refurbished computer hardware, parts and accessories is permitted.

If so, what are the documentation requirements?
Documentation required is the Airway Bill and the Commercial Invoice.

Is special labeling required?
No special documentation/labeling is required.

What value should be shown on the invoice?
The actual value of the equipment. The Customs office may verify the value by applying a depreciation rate to similar (new) equipment that has been imported before.

How are duties and taxes assessed?
Duties and taxes will be assessed over the declared value of the merchandise.
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2. USED COMPUTER EQUIPMENT
Is the import of used computer hardware, parts, and accessories (including toner cartridges) permitted?
Same as for refurbished computer equipment. See above answers.
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3. REPAIRED COMPUTER EQUIPMENT
Are duties and taxes assessed on the re-import of repaired computer equipment?
No duties are assessed on the re-import of repaired computer equipment provided that a special permit was obtained before the computer left the country.

How should the commercial invoice appear?
The commercial invoice should include only the "new value" added to the equipment, i.e the value of the repair plus parts. If the equipment was under guarantee, then there is no duty assessed. Before re-exporting the equipment, the owner of the equipment should have filled out a special form indicating that the equipment was temporarily re-exported for repair/guarantee purposes.
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RESPONSE INFORMATION

This response was prepared by the U.S. Department of Commerce/Commercial Service in Panama in February and May 2003. For further clarification please contact:
J. Enrique Tellez
Senior Commercial Specialist
U.S. Embassy, Panana
enrique.tellez@mail.doc.gov

Special Notes: The above information is intended to serve only as unofficial guidance. In seeking to obtain government rulings in specific cases, it will often be necessary to refer to special laws, separate regulations and announcements, and case-by-case decisions by the government. Beyond the general guidelines shown above, legal counsel should be retained at an early stage of consummation of a major procurement contract, and before entering into any legal commitments.

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