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Getting an exemption from the payment of the 2% land transfer tax in Panama

It is possible, if you are making a donation of property in Panama to a spouse or child, to get an exemption from the payment of the 2% land transfer tax which is charged on the basis of the cadastral value of the land. 

The basic documentary requirements for this request are the following:

1. Application in writing to the Provincial Income authorities
2. Certificate from the Public Registry of the property to be donated
3. Birth Certificate of the child (where the donation is from parents to children) - with $4.00 stamp duty
4. Marriage Certificate (where the donation is between spouses) - with $4.00 stamp duty
5. Photocopy of the cedulas (personal identity cards) of the parties, where they are of legal age.

The documentation should be presented to the Ministry of Economy and Finance's office. 

** Please note - if the marriage certificate or birth certificate is from overseas, then it must be appropriate authenticated.  This means - either by the Panamanian Consulate there or by way of Apostille.  For more information regarding these forms of authentication, have a look at: Consulates and Apostille. 

Legal basis: article 2, Law 106 of 1974, as modified by Law 6 of the 3rd of February of 2005. 

Article 2:  This tax shall not be incurred in expropriations, sales and purchases which are made with the State.  Nor shall it be incurred in transfers by donation, as long as one of the following applies:

a.  Transfers to the State, its Autonomous institutions, Municipalities and Municipal Associations;

b. Transfers between family members of the first degree of relationship and spouses.

The Income Tax Department shall regulate this exemption from Real Estate Transfer Tax as contemplated in this Article. 

For more information on how to donate land to your children or spouse, please do not hesitate to contact us:  info@lawyers-abogados.net.

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Last modified 26-Sep-2007 17:37 -0400