Panama Quickbooks

There is some good news for exPats in the recent tax changes.

Fri, 03 Sep 2010 19:08:40 GMT

Buried in the depths of two recently passed acts of Congress with pleasant sounding names that bear vague resemblance to the legislative intent are a few things that are actually good for those of us who live outside the USA .

I’ll share some of the good news and the bad news that come out of these two major legislation actions that have substantial tax code modifications imbedded in them. These tax law changes were included specifically to look like they were incorporating a means to pay for the benefits that the proponents of the legislation were boasting about.

Some in Congress have been touting their efforts to provide wider health care services as provided in the legislation titled The Patient Protection and Affordable Care Act. There are dozens of changes to the IRS code buried at the end of this legislation, some of which take effect immediately; others are phased in over the next four years.

There’s good news on two different levels in the Act. On a broad level, it is an employment act, beyond the explicit inclusion of incentives to train and develop a larger medical support group of doctors and nurses and the forgiveness of student loans used to get their expensive education. There will be a large cadre of new monitors needed to review and address the compliance reporting requirements of employers, insurers, and tax payers. The rules are so complex and the imposition dates so varied that it will take sophisticated new computer programs to track the payments and specially trained accountants to monitor and verify compliance. Companies will have to document and report both to the IRS and the recipient the exact amounts paid for health plans, ostensibly so that the recipients can ‘accurately file’ their tax forms. All payments made by any trade or business that exceed $600 will be reported to the IRS. These new regulations are likely to significantly increase the costs of financial audits of any company.

In the 70s when the last huge social tax reforms were done, those of us in the financial service professions referred to the legislation as the “Accountants and Attorneys Relief Act of 74”. Nearly everyone had to meet with one of us to review their wills, and revise their estate and retirement planning. Those employment effects will be dwarfed by the complexities that companies are facing as a result of these new laws. Individuals will have to carefully review all their business employment contracts, personnel agreements and insurance contracts to account for the changes imbedded in this Act. All pre-tax medical payment plans will need to be reviewed and revised including Health Savings Accounts, Archer Medical Savings Accounts, and other Flexible Health spending arrangements. All employer reimbursement plans will need to be reviewed and amended to meet the $2,500 limits imposed by the Act. Individuals who are not part of any employer plan will have to investigate, negotiate and enter in to health insurance contracts with approved insurers. Those plans are supposed to be affordable (it says so in the title of the Act), but if you didn’t need insurance or want it, you are now required to buy what is likely to be a sizable redistribution of your formerly disposable income.

So what’s the good news for exPats in the Health Care Reform Act? Buried in a subparagraph to the legislation is a reference to those exempt from the requirements to obtain insurance coverage. The phrase used is “… those not legally residing in the US are deemed to have adequate coverage…” This author believes that this excludes those of us who are legal residents of a foreign country from having to obtain a federally approved health insurance plan. Veterans covered under TriCare are safe. What is not clear is whether the older exPats who have Medicare -- which is of no value outside of the US -- may be required to purchase the doctor coverage Part B even though it provides no benefit outside the US. Write your Congressional Representative and ask them.

The other good news for exPats, at least those living in Panamá and Costa Rica, is that there are first-world medical services available here at reasonable cost. Although we have seen a ratcheting up of the costs in the past two years, they are still more affordable here than US-delivered health care.

The H.I.R.E. act (Hiring Incentives to Restore Employment Act) was passed 18 March 2010 and signed into to law by President Obama. I’ve written separately at our webpage about the expected consequences on the foreign banks to document and comply with newly imposed complex reporting requirements of any US account holder. We are already receiving reports from clients and others that the foreign branches of US based banks are closing or freezing accounts of Americans. Preliminary analysis indicates that the affected account holders are generating significant funds flows and unless and until the account holder can satisfy the banker that the sources of funds are entirely legitimate they are unable to use the account. Any resistance to or delay in supplying the requested information will result in either the bank refusing to accept an incoming transfer or the outright closure of the account. More than one business associate has complained to me personally about being treated like a criminal by some low level bank employee. In one case the individual had merely transferred his own money from a US bank to a foreign account that was intended as a gift. But it is not just ‘wealthy Americans’ who are being inconvenienced. Some banks are applying these rules to a level even we skeptics had not imagined. I know of one individual who gets a $200 a month child support payment and had to physically visit the bank and provide them with current copies of notarized settlement papers that the funds were what she claimed they were, and the bank had been receiving the monthly payments for at least five years from the same source. She was told to be sure to return every year to verify the facts again.

But there is some good news even in the HIRE act. Many exPats were fearful of the 30% withholding requirement on transfers. There is no evidence to suggest that any transfer that is not already a withholdable event will be subject to this so-called ‘transfer tax’. And even if a source erroneously withholds funds there will be a 1099 issued and the taxpayer can get a refund or apply the payment to other tax liabilities. This does not mitigate the inconvenience nor soothe the irate feelings of one who may need the entire amount transferred, but the money is not being confiscated as some have suggested. It is however likely to increase the compliance costs of filing your yearly tax returns.

Investors will pay a huge price for the Health Care Reforms

Mon, 05 Apr 2010 23:54:13 GMT

You may have been wondering how the US government planned to pay for all those new users of government mandated medical ‘protection’ – well, here’s the bad news: There will be a 3.8% tax on net investment income beginning in 2013.

Today successful retirees will need to completely rethink their budgets and allocations of income sources if possible. Previously, all you needed to consider were the marginal income tax rates to determine what you could net from an investment. Now, deduct another 4% from what will be available.

The just enacted “Reconciliation” of the two versions of the US Congress massive health care revisions has a substantial Medicare tax levied on income that has never before been included in the social security/Medicare tax scheme. Until this new law was imposed, most workers earning a salary paid social security taxes up to a maximum salary of $106,800 for 2009 and 2010. Self-employed entrepreneurs paid both ‘halves’ of the 15.3%. Employees had half deducted from their salary and their employer paid the other half. After the government realized that the now-beloved Medicare program could not sustain itself on just the 2.9% portion on earned income, a Medicare Tax adjustment was added in 1993. Congress removed the upper limits on earned income and that 2.9% tax continues on all earned wages.

President Obama has signed into law a controversial Health Care bill with a comforting title of “Patient Protection Act” with many costly changes being phased in over the next four years. Some benefits will start immediately – an obvious political decision to hand out the goodies and then wait a year or two before they start to take it all back and then some:

The new tax law will levy that 3.8% tax on net investment income if your Adjusted Gross Income is above $200,000. Another example, perhaps, of the ‘sharing the wealth’ concept of the current political agenda?

Some historical perspective is important to note here. Social Security started out as a $60 a year tax on workers’ wages intended to provide retirement benefits to individuals over the age of 65. A related fact to note: the life expectancy of a white male child born in the middle 1930s was 62! That $60 a year tax had grown to $468 by 1970 and to $1,605 by 1980. A top wage earner in 2010 will pay $6,622 social security (their employer will pay the same amount for a total of $13,243) on the first $106,800 he or she earns plus another 1.45% on everything they earn for Medicare. Self employed individuals will pay the full 15.3% on the first $106,800 for a total tax of $16,340 plus 2.9% on any earnings over $106,800 for Medicare.

To be fair and balanced, we ought to look at the ‘inflation adjusted costs’. According to the US Bureau of Labor Statistics, which publishes the inflation data tables, the inflation rate between August, 1937 when Social Security was signed into law, and February 2010 was a whopping 1,394.77% - so that $60 levied against your grandparents would be $896 in 2010 inflation adjusted terms. But, the actual social security tax on the maximum earnings in 2010 is over $13,000 plus another $3,000 for Medicare.

As written the “Obama Care” package will soon add an additional 3.8% tax on almost ALL other sources of income. For now at least, it does exempt qualified retirement plans from the tax base, so your IRA is safe for now. But if you look at the history cited below, you may not be so confident that it will remain safe.

Do you really believe that this nearly 4% tax will a) actually cover the costs and b) remain the same low rate? Is there any prior government ‘benefit’ that has not grossly exceeded the budget in spite of generating huge surpluses? How about social security or Medicare? Have they been well-managed and free of waste and fraud? Will this program be any different?

For those of you whose eyes don’t glaze over looking at numbers and your brain doesn’t shut down reading financial details, the following may be of interest to you. It will impact you regardless of whether you like to read about it or not.

A bit of comparative history of the growth in Social Security is relevant here.

On 14 Aug 37 FDR signed into law the original social security program and the administrative organization that grew from that Federal Insurance Contributions Act (thus the name FICA tax) was established. Ignore the fact that they were not ‘contributions’ as they were not voluntary and they provided no insurance. The base tax was 2% of the first $3000 earned. The first retiree according to the history by the SSA received a lump sum distribution of $ 0.17 – that is not a typo: seventeen cents! In 1937 a total of $1,278,000 was paid in benefits to 53,236 recipients. In 1939 coverage was expanded to include survivors and dependents. The base and rate were not changed.
In 1950 the tax base expanded to additional income, raised the base to $3,600 and the rate to 3%. In 1950 $961 million dollars was paid out to 3.3 million beneficiaries.
In 1956 disability insurance protection was added, an early retirement privilege at 62 for women was permitted and the base was increased to $4200 and the tax rate was raised to 4%. In 1961 early retirement for men was permitted and payroll taxes increased to 6%.
On 30 July 1965 President Johnson signed into law Medicare and its companion Medicade as part of his “Great Society” initiative. Former President Harry Truman was the first enrollee – he began advocating national health care in 1945 and the signing ceremony was held at his presidential library in Independence MO. The Medicare Part B premium was $3 a month.
In 1966 the combined Social Security and Medicare tax was 4.2% on $6,600, including the new 0.35% Medicare tax, paid by both the employee and employer for a total tax of 8.4%. Self employed persons paid a 6.4% tax.
In 1970 $31.9 Billion dollars was paid out to 26.2 million social security beneficiaries. In 1972 COLAs were added to account for then-rampant inflation effects on retirement benefits. The FICA tax rate increased to 9.2% and the base upped to $9,000. During the 1970s the wage base increased incrementally to $22,900.
In 1980 $120.6 Billion dollars in benefits were paid out by SSA to 35.6 million beneficiaries. In 1983 US government civilian employees were added to the Social Security program, and began ‘contributing’ the combined social security and Medicare taxes too.
In 1990 SSA paid out $247.8 Billion dollars to 39.8 million beneficiaries. The tax base for SS in 1990 was $51,300 and the FICA tax was 12.4% and the Medicare tax was 2.9% a total of 15.3%. Since 1993 there has been no upper limit to the Medicare tax levied on salaries and wages.
In 2000 SSA paid out $407.6 Billion dollars to 45.4 million beneficiaries. In addition SSI, the survivors and dependents benefits, in 2000 totaled $30.7 Billion paid out to 6.6 million beneficiaries. The maximum wage base for SS was $76,200, and the Medicare Part B premium was $45.40 a month.
On 8 Dec 2003 President GW Bush signed into law the Medicare Modernization Act, which included the outpatient prescription drug benefit. The wage base in 2003 was $87,000.
The wage base in 2010 is $106,800. The Medicare part B premium is $96.40 unless your 2008 income was over $85k, and if so then you will be assessed a 15% increase in premium to $110.50. Add to that starting in 2013, the income tax deduction if you itemize, unreimbursed medical expenses will be deductible only to the extent they exceed 10% of your AGI, up from 7.5.

So… if you have read through all that, do you still think the 3.8% tax on net investment income over $200k will still be the law in a few years? Call me an ole skeptical CPA if you want, but I don’t believe it will for more than the first year. Remember, they still have two years or so to change their minds about the rate and the base before it actually starts to be collected. I suspect too, that the IRS will implement some administrative rules to require withholding from dividend and interest payments just to make sure everyone pays their fair share. Note too, that most of these increases don’t start until after the 2012 Presidential elections. Hmmm.

Year-end tax planning alert

Wed, 25 Nov 2009 13:54:18 GMT

“The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.” So affirmed the US Supreme Court in Gregory v Helvering, 293 U.S. 465 (1935). Despite many attempts by administrations of both parties over the intervening 75 years to characterize efforts of taxpayers to minimize their liability to the US Treasury as either unpatriotic at the least or criminal at worst, the rule of law still holds. Tax evasion is illegal, and efforts to conceal assets and refuse to file returns and pay legally due taxes will result in fines, penalties and sometimes incarceration. However, tax avoidance is simply using the existing rules to minimize the contribution to the tax collector and it is proper and appropriate behavior, long supported by the courts.

It is up to the individual taxpayer together with competent tax advice and legal counsel to establish a solid, legitimate plan to reduce their tax liabilities. This is the time of year to review what the uneven economic experiences of 2009 have produced and to make whatever year-end adjustments are appropriate so as to minimize the tax consequences and to avoid any unpleasant surprises come tax filing time.

For US citizen/taxpayers Jan 15^th2010 is an important date. It marks the due date of the final quarterly estimated tax payment due to the US Treasury. There are various frames of reference and safe harbor rules regarding estimated taxes, and a number of ways under the IRS regulations to avoid underpayment penalties. An hour invested with a qualified CPA could save time, aggravation and anxiety, and more importantly money.

The most common penalty is for underestimating the annual tax bill paid in quarterly increments to the US Treasury (Panama has a similar trimester program). This occurs when the ultimate tax that is due is more than projected and the Treasury levies a ‘penalty’ which amounts to interest on the money that should have been paid earlier. The current interest rates are relatively low, and many taxpayers don’t worry about the few hundred dollars levied on an underpayment of estimated taxes. However, substantially understated income and the related taxes are subject to a 20% penalty of the tax, in addition to any other penalties and interest, so it is important for the US citizen/taxpayer to make an accurate assessment of their annual income before year end, in order to be able to adapt and adjust in the last month of the year if possible and minimize the ultimate tax liability.

Compare your 2009 income to your 2008 income and related tax liability. If there is a significant difference in either the likely income or the amount of tax paid to the US Treasury, then it is probably useful to seek the help of a competent tax advisor to see if you can arrange your financial affairs to legally shift income between 2009 and 2010 or prepay some expenses in 2009, to reduce the projected tax due and to adjust the estimated payment due on 15 January.

Tax evasion– who is the target?

Mon, 23 Nov 2009 14:43:18 GMT

US Justice and Treasury Departments are making public announcements regarding their successful penetration of the Swiss banking secrecy laws. The IRS Commissioner, Douglas Shulman held a news conference in Washington, DC 17 Nov 09 to proclaim their “offshore disclosure initiative” a big success.

The Justice Department has projected that “tens of millions of dollars” in taxes will be collected by the US Treasury as a result. The IRS Commissioner declined to predict or reveal how the government arrived at these projected figures.

However, there are some insights available that can be derived from the US-Swiss agreement that shed light on both who they are targeting and what financial levels attract their attention. The accounts targeted for disclosure by the Swiss contained over 1 million Swiss Francs (about $990,000 US), although smaller account balances of 250,000 Swiss Francs were included as well as any accounts that generated more than 100,000 Swiss Francs annual income.

The US Treasury and Justice Departments are proud of their efforts to make a significant dent in the bank secrecy laws of other countries. The US banking industry is required to disclose nearly any and all details and large monetary transactions are reported daily as a matter of normal business. But the international banking community has long resisted and that prompted a few of the US politicians – who seem eager to spend vast sums of money they don’t have -- to claim that billions of dollars of taxes go uncollected by ‘international tax evaders’. The implication being, that if they could only get all the tax cheats to pay up they could easily afford the programs they propose. The result was that administrations of both political parties have used the State Department efforts and international negotiations to leverage access by the US government into private financial records that they have no legal jurisdiction or control over.

The collapse of the Swiss banking protections started with the Swiss decision to disclose the long-held assets of Nazi-era transfers and to facilitate the recovery of those assets by the heirs of the lawful owners who often had little documentation, but could demonstrate heritage rights. It was long overdue and provided the legitimate heirs with access to their parents and grandparents assets.

The US government is currently demanding access to financial institution records in countries they determine to be ‘tax havens’ including Panamá. They are using the successful penetration of the stalwart Swiss banking as leverage to gain access to the records in other international banking centers.

So what action does a US citizen/taxpayer need to take?

US citizen-taxpayers with a cumulative sum in excess of $10,000 in any combination of offshore accounts are required to file the annual Treasury Department Form 90-22.1 disclosing the financial accounts they have a financial interest in or signature control over. The TD F 90-22.1 document was significantly expanded in December 2008. The form is NOT part of your annual income tax return and is due in Detroit by 30 June each year. However there may be link on the income tax return that will trigger a cross-check to see if the report has been filed. The TD form is an information return, there is no tax calculation and so far as this CPA has been able to determine, no late filing fees. There can be substantial fines and penalties for failure to file the forms which this author has noted in previous public articles and newsletter postings to his client base.

IRS Demanding Reports on Foreign Trusts

Fri, 29 Aug 2008 04:00:00 GMT

Forget about the semantics argument raised last month by the “expatriate” controversy, the IRS is apparently moving aggressively to get at the details behind the financial dealings of US citizen-taxpayers who either transfer money or property into a foreign trust or receive benefits from a foreign trust.

Let’s look at the easy one first. The use of the word expat to describe those citizens who live in a country other than where they were born is different than the verb “expatriate” which means to denounce and abandon citizenship.

Those who voluntarily give up their US citizenship are treated harshly by the IRS. It is a complex issue and we will address it more fully in a following article, but let me give you some basics. Among the many documents you have to submit is an IRS Information Return Form 8854 which you can download from the irs.gov site. The law applies to any US Citizen or long-time resident whose prior five years income tax liability averaged more than $124,000 and whose net worth exceeds $2 million on the date of relinquishing citizenship or residency.

IF you relinquish your USA citizenship for tax reasons, the recently passed HEART Act imposes a tax based on a gain that would have resulted at the market value of all your worldwide assets as of the day before you renounce. It is yet to be tested in tax court and is a controversial topic of much discussion among tax attorneys in the gift and estate field. A local US attorney with experience and knowledge in the area and I will provide some references and more details soon.

So what does the IRS consider a ‘foreign trust’? - Our analysis of the IRC indicates that the Panamanian Private Interest Foundation would likely be treated as a foreign trust. It is NOT a private foundation under the US code which is usually treated as philanthropic tax-exempt entity.

August 5th, the IRS released a fact sheet focusing on reporting requirements that carry significant penalties for failure to comply. These are not new rules, but indicate a new emphasis by the IRS and a warning. The report and related financial information is likely to increase the compliance costs to the owners of a foreign trust by $1,000 a year – the required Form 3520 is a complex 6 page information return that provides full disclosure of the owners, beneficiaries and financial transactions between US Citizen-taxpayers and the trust. It is very similar in content to the 4 page Form 5471 Controlled Foreign Corporation information return. Both of these forms are labor intensive to prepare and therefore can be expensive.

The IRS is explicitly trying to get at the funds they consider to be offshore where taxes can either be avoided or deferred, and they seem determined to prevent US persons from using offshore financial arrangements to accomplish those goals.

Failure to file can result in penalties of 35% of the value of the transfers to the trust, 35% of the gross value of the distributions received from the trust, and 5% a month up to 25% of the gifts for each month the failure to file continues. Plus 5% of the gross value of the trust assets treated as owned by a US person. No penalties will be imposed for reasonable cause.

Be aware too, that the IRS explicitly states that a foreign country’s financial non-disclosure laws or the reluctance of an offshore fiduciary to provide the information, or provisions in the trust instruments that prevent the disclosure are NOT reasonable cause.

If you are the founder of a Private Interest Foundation, speak with your offshore services provider to make sure that there are no unpleasant surprises in your future.

Tom is a semi-retired US CPA who lives in Panamá and helps expats with their taxes and businesses set up QuickBooks systems. He can be contacted at tom@panamaquickbooks.com

TPA – What impact on exPats doing business now in Panamá?

Thu, 20 Sep 2007 04:00:00 GMT

We have reviewed the principal sections of the US International Trade Commission analysis of the impacts of the proposed Trade Promotion Agreement. We looked at the sections that deal with Financial Services, Investment, Professional Services and to a lesser extent, Intellectual Property Rights. Our focus was to get a feel for the potential impact to our client base and target market – exPats in the hospitality and real estate related businesses.

Our thanks to Don Winner and The Panama-guide.com for providing the link to the original document. While the US approval of the TPA is currently in question because of a Panamanian political controversy that we don’t understand, the real impact is not going to be on extranjeros living and trying to work in Panamá. The real impact is for the people of Panamá who may want to purchase US-made goods.

Nearly everything Panamanian that goes north (some $337 million in 2006) enters the US without any import duties. Nearly everything that comes south (over $2.5 Billion in 2006 – over half in mineral fuels, machinery and equipment) is taxed with a variety of import duties ranging from insignificant to significant. Automobiles, for example are taxed at a range from 3 to 20 percent, but pickup trucks and other special use vehicles are subject to a flat tax of 10%.

Repeatedly, the Commission reminds the readers that the impact of the TPA on the US economy is miniscule, due to the very limited size of the Panamanian economy. Here are some interesting statistics from the Panamanian government:

According to the Contraloría General de la República de Panamá, the estimated population in 2006 was 3.284 million, of which 1.292 million are 19 years or under and 252,000 are over the age of 60 – both groups making up a combined 47.1 % of the population with little or no economic buying power.
The employment statistics for 2006, the latest numbers available, indicates that a total of 1.295 million Panamanians are ‘employed’ including 315,000 part time workers. Of those employed, the government employs 190,145; private enterprise 532,800 (of which 56,000 are part time and 62,400 considered ‘invisible under-employed’ workers); another 375,000 are working for themselves (nearly half part-time); 27,000 are working in family businesses; and just under 40,000 are listed as owners of their own business.

Note: For comparative purposes remember that the USA economy is larger than the next four combined (Japan, Germany, China, UK). The CIA World Fact books for 2007 ranks Panamá GDP 87^th in the world at $16.2 billion. For the curious, you might want to check out the Strange Maps site for a comparison of your home state’s world-market equivalent economy and you’ll probably be surprised.

Yes, some American exporters could gain a small niche in a small market. The Panama market is currently the 102^nd import source to the USA. The USA on the other hand is the largest Panamanian market, although the Trade Commission only relates the US trade with Panama in world-wide terms, and Panama is the 45^th largest market for US exporters.

Of interest to US-citizen extranjeros is the potential to reduce the import taxes on some of the food items we like. Pensionados or those in tax-favored businesses, like tourism, can already import cars and machinery and equipment import-duty free, but you still have the ubiquitous ITBMS of 5% which you have to pay.

Chapter 3 of the Report deals with the impact of market access for services, essentially financial services, excluding insurance. Again, the expected value to the US market (the focus of the Commission) is to point out the small potential market. The Commission concludes that new cross-border exports of financial services or new US investment in the Panamanian financial services market would be limited. So don’t expect to find easy consumer loans or mortgages on your property.

However, the professional services provisions of the TPA would likely increase market access and national treatment for foreign born professional services providers (like doctors, lawyers, accountants, and engineers) who currently are prohibited from practicing their professions. Some opportunities currently exist for CPAs if the state licensing board of the professional offers reciprocity to Panamanian professionals. Most Panamanians don’t meet the educational or testing requirements of the US licensee and therefore can’t qualify for a reciprocal certification. The solution for US professionals is to associate with local licensed practitioners. The report suggests that ‘over time’ mutual recognition agreements could be reached such as currently exist for engineers. There is a provision pending for foreign accountants to apply for a special permit to perform non-attest (audit) functions with a range of restrictions – only partially opening the door to extranjeros.

Of particular interest to us in accounting and financial reporting was the comparison of the numbers of CPAs. In the USA there are over 335,000 CPAs. In Panama there are fewer than 700 CPAs among 5,000 accountants and only 100 accounting firms.

In Chapter 5, the Report reviews impact of the TPA on intellectual property rights. They state that the standards in the TPA, if fully implemented and enforced, may reduce IPR infringement in Panama. This could benefit the US motion picture, sound recording, business software, entertainment software, and book publishing industries. US industries that might benefit from patent and confidential data protections include pharmaceuticals and agricultural chemicals.

But we doubt that the local economy will stop duplicating CDs and selling them on street corners for a fraction of the ‘original’ cost. It may make it easier for companies like Microsoft, to continue their occasional visits to the internet café’s that proliferate in the capital city and demand that they either pay for the license or remove the software from their many pcs.

However, if the US software industry truly believed that their copyrights would be honored, Panamá might be able to divert some of the business currently moving to Costa Rica. But it would have to be coupled with a substantial increase in the perceived value of the university education that is offered here in Panamá. Ask any Costa Rican about the impact of having Intel build its Central American operations there and they’ll proudly tell you about their average salary increases and the spill-over effect on other professional wages.

Nowhere in the TPA are educational institutions even mentioned. So that very important export – the best and brightest Panamanian youth -- will probably continue to seek their advanced educations in the USA or Europe.

The bottom line? In our opinion, there is not much impact on extranjeros living and trying to work in Panamá. There should be a huge potential impact on anyone living here who may want to buy expensive US-made goods or services and who doesn’t already enjoy some tax-advantaged exemption.