The taxable income that occurs, from any source, within the territory of the Republic of Panama is subject to this tax, whatever the
place where it is perceived

Taxpayer, as the term is used in this Title, is the natural person or
legal, national or foreign, that receives the taxable income subject to the tax

Article 695. Taxpayer's taxable income is the difference or balance resulting from
deduct deductible expenses and outlays from your gross income or general income.

Article 696. Gross income is the total, without deducting any sum, of the income of the
taxpayer in money, in kind or in securities,

Article 697. Deductible expenses or expenditures are understood as the expenses or expenditures incurred in the production of income and in the conservation of its source; Consequently, those expenses, costs or losses generated or caused in businesses, industries, professions, activities or investments whose income is from foreign or exempt source will not be deductible, among others.

Article 698. When for any reason the taxpayer stops deducting expenses corresponding to one (1) taxable year, these cannot be deducted from the income of any subsequent year.

Article 699. Legal persons shall pay for their net taxable income for the 1995 fiscal year and in the following years, the Income Tax in accordance with a rate of thirty percent (30%).

Article 705. For the purposes of the annual tax, the taxable year comprises a period of twelve (12) months as follows: 1) General calendar period that begins on January 1 and ends on January 31
December.
2) Special period, which requested by the taxpayer begins on the first day of the
respective month requested, until completing the twelve (12) month period.
For the purposes of applying the annual tax, it will be applied from its validity throughout the taxpayer's current fiscal period.

Article 706. The tax on the taxable income of legal entities will fall on what they obtain during the taxable year without deducting from it what dividends or participation quotas must be distributed among their shareholders or
partners.

Article 707. The taxes payable by a person already caused at the time of his death will be covered by his heirs as a debt of the succession. Taxes incurred after death will continue to be paid by the estate until the property is adjudicated. Once this has been done, the heirs will present individual declarations for the part of the income that corresponds to each one for the purposes of the tax settlement.

The income of natural or legal persons who by virtue of Public Treaties or contracts authorized or approved by the Law are exempt from the payment of the
tax;

b. The income of the State, of the Municipalities, of the Associations of Municipalities and of their autonomous or semi-autonomous institutions;

c. The income of the churches of any cult or council seminaries and religious or charitable societies, when such income is obtained by direct reason of the
worship or charity;

d. Income from nursing homes, hospices, orphanages, churches, foundations and associations
non profit

Income from the international maritime trade of merchant ships
nationals legally registered in Panama

F. The interests that are paid or credited on the securities issued by the State and
the profits from its disposal;

g. The prizes paid by the State Lotteries and the profits obtained in the
games of luck and chance and in bets and prizes won in exploited activities
For the state

h. The sums received as compensation for accidents at work and
insurance in general, alimony and benefits paid by the Caja de
Social Security because of the risks it assumes

k. The salaries and fees paid to the personnel of the consular corps accredited in the
Republic, unless they belong

Article 786. The tax corresponding to one (1) year may be paid in three (3)
quotas or games. The payment of the first installment or item must be made no later than
April 30th; that of the second, no later than August 31st, that of the
third at the latest; December thirty-first

When the amount of the annual tax does not exceed ten balboas (B / .10.00) the payment will be
will be done in a single game, and will take place no later than December 31,
every year.

Article 787. The payment of a quota or item of the tax or of the
all of it, without having previously paid the fees or items
previous years or the entire tax of the previous year.

Article 788. If at the expiration of the corresponding terms it has not been paid
this tax, the respective collector will require the taxpayer to carry out the
payment. If this is not carried out, the Collector will proceed to collect it by executive means.

Article 789. In the enforceable for the collection of this tax may be seized
the goods for which it is suitable.

Article 790. The payment of the tax will be made preferably in the Collection Office.
of the place where the taxed asset is located.

Article 791. The obligation to pay the tax prescribes after ten years counted.
from the last day of the year in which it should have been paid.

Article 792. No registration will be made in the Public Registry regarding
real estate subject to this tax as long as it is not proven that the property
is at peace and safe with the Treasury.

Article 793. The officials in charge of issuing permits to lift
constructions, repairs or repairs are obliged to send monthly to
the Cadastral Commission and the General Administration of Internal Revenue a list of the authorizations granted, with the data that said offices determine.

Article 794. The Head of the Public Registry is obliged to report weekly to
the General Administration of Internal Revenue on all registrations that refer to the transfer of ownership of real estate.

Article 795. Notaries Public will send monthly to the Administration
General Internal Revenue and to the Cadastral Commission a list of all the deeds issued during the month, which refer to real estate, with indications of the affected properties and the values ​​assigned to them during the month prior to the
writing.

Article 796. For the formation and revision of the real estate cadastre, the
State agencies are obliged to provide the Cadastral Commission and the General Internal Revenue Administration with all the cooperation that is necessary.

1. The sale, exchange, dation in payment, contribution to companies, assignment or any
   another act, contract or convention that has the purpose stated above.

2. The impact on the use or personal consumption of the assets of the sole proprietorship,
   of companies or entities with or without legal status, by the owner,

3. Contracts of promise of sale with transfer of possession of the
   good.

4. The awards to the owner, partners and shareholders, which are carried out as
   consequence of the definitive closure of the company, total or partial dissolution and definitive liquidations of commercial, industrial or service entities.

b. The provision of all kinds of services by merchants, producers, industrialists,
professionals, lessors of goods and service providers in general, excluding those of a personal nature that are provided in a dependency relationship.

c. The importation of personal property or merchandise, whether
intended for the introducer's personal use or consumption, whether for charitable, cult, educational, scientific or commercial purposes, whether
are used in the transformation, improvement or production of other goods and for any improvement or production of other goods and for any
lawful object under the laws.

3. Perception of the total or partial payment of the service to be provided.

c. On importation, at the time of customs clearance-declaration and, in
in any case, before its introduction to the fiscal territory of the Republic.

d. In the case of personal use or consumption of the owner or partners of the company, the
legal representative, dignitaries or shareholders, at the time of withdrawal of the asset or its accounting, whichever occurs first.

to. In the transfer of goods: it is the price. This price will be integrated
with all the amounts charged to the buyer or borrower, such as ancillary services made by the taxpayer and that benefit the acquirer, such as
transportation, freight, packaging, financing interest, whether they are billed jointly or separately. In the case of services, it will be understood by
price the amount of the agreed professional fees.

c. In payments in payment, in contributions to companies or in any other event
taxed that transfers ownership of the personal property or a service is rendered: the value of the transferred goods or services rendered.

d. On imports: the CIF value plus all taxes, fees, duties,
customs contributions or levies that affect imported goods. In those cases where the CIF value of the goods is not known, it will be determined
adding fifteen percent (15%) of it to the FOB value.

and. In the leasing of movable tangible property and in the other acts in which
imply or have the purpose of giving the use or enjoyment of the property: the invoiced value of the rent or, failing that, the value of the contract, throughout the term of its validity, always
that said amount is not less than the depreciation, when applicable, with which the asset is affected in the same period. In the latter case, the tax base will be at least
less equal to the corresponding depreciation plus a profit of fifteen percent

F. In the leasing of real estate and in other acts in which it is involved
or its purpose is to give the use or enjoyment of the property: the invoiced value of the rent.

to. Transmissions in matrimonial agreements, contributions or division of assets
spouses.

b. The expropriation, sales and provision of services made by the State, except those that
carried out by its industrial and commercial companies

c. The adjudications of assets within any ordinary or
special, including property division lawsuits.

d. Transfers of negotiable documents and titles and values ​​in general.

and. Payments, including interest paid and received, generated by services
financial services, provided by entities legally authorized to provide this type of service.

F. The payments and interests of the contributions to pension funds, unemployment funds,
mutual funds and other means of savings.

g. The legal professional services that are provided to persons domiciled in the
foreign companies, private interest foundations, trusts or vessels that do not generate taxable income within the Republic of Panama, as well as services
legal services provided by international trade ships registered in the national merchant marine and the registration of their naval mortgages.

• Have a minimum national content of 20% of the manufacturing cost or
  production and contain at least a national added value of 20%; or

• Have a minimum national content of 10% in the cost of manufacturing or
  production, as long as they are located outside the metropolitan area, as determined by the regulations issued by the body
  executive.

j) Live cattle, pigs and horses, except fine breed

According to Title VII of the Third Book of the Fiscal Code, three types of
customs offenses: misdemeanors, fraud and smuggling. Each of them is assigned the respective sanctions.

Articles 545, 553, 555, 557, 561, 564 of the C.F. they are the main ones to the effect.