Panama to regulate digital economy and Airbnb via new tax bill

The Panamanian Cabinet has approved Bill 30-26, a legislative proposal to update the Fiscal Code and regulate the collection of the Sales and Services Tax (ITBMS) within the digital economy. The initiative aims to close legal loopholes that allow certain goods and services consumed in Panama to evade taxes when purchased through foreign electronic platforms or mobile applications.

Minister of Economy and Finance Felipe Chapman stated that the measure is intended to “level the playing field” between local merchants and international e-commerce giants. Currently, products purchased in local establishments are subject to ITBMS, while those imported via foreign digital platforms are not. The law will also extend tax obligations to short-term vacation rental platforms like Airbnb to ensure they operate under similar tax rates as traditional hotels.

To determine if a digital transaction occurs within Panamanian territory, the bill establishes technical criteria including the user's IP address, the location of the payment card or bank account, the SIM card country code, and the registered billing address.