{"id":2648,"date":"2026-05-14T12:06:27","date_gmt":"2026-05-14T17:06:27","guid":{"rendered":"https:\/\/canonasociados.com\/en\/?p=2648"},"modified":"2026-10-13T17:16:17","modified_gmt":"2026-10-13T22:16:17","slug":"panama-economic-substance-bill-impact-colombia","status":"publish","type":"post","link":"https:\/\/canonasociados.com\/en\/panama-economic-substance-bill-impact-colombia\/","title":{"rendered":"Panama Moves Forward with New International Economic Substance Rules"},"content":{"rendered":"\n<div class=\"elementor elementor-3282\" data-elementor-id=\"3282\" data-elementor-post-type=\"post\" data-elementor-type=\"wp-post\">\n<section class=\"elementor-section elementor-top-section elementor-element elementor-element-34c6938 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-element_type=\"section\" data-id=\"34c6938\" data-settings='{\"jet_parallax_layout_list\":[]}'>\n<div class=\"elementor-container elementor-column-gap-default\">\n<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-6cdba7e\" data-element_type=\"column\" data-id=\"6cdba7e\">\n<div class=\"elementor-widget-wrap elementor-element-populated\">\n<div class=\"elementor-element elementor-element-84f861b txt_post elementor-widget elementor-widget-text-editor\" data-element_type=\"widget\" data-id=\"84f861b\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<p data-end=\"455\" data-start=\"218\" style=\"color: #000000; font-size: medium;\">Panama recently introduced a bill seeking to strengthen the \u201ceconomic substance\u201d requirements applicable to certain entities belonging to multinational groups that earn foreign-source passive income.<\/p>\n<p data-end=\"709\" data-start=\"457\" style=\"color: #000000; font-size: medium;\">The initiative responds to standards promoted by the OECD and the European Union, aimed at combating structures lacking real economic activity and reinforcing international tax transparency.<\/p>\n<p data-end=\"873\" data-start=\"711\" style=\"color: #000000; font-size: medium;\">This potential regulatory change could have significant effects on holding companies, investment vehicles and other international structures with an impact in Colombia.<\/p>\n<p data-end=\"873\" data-start=\"711\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h3 style=\"color: #000000; letter-spacing: normal;\">What does the Panamanian bill seek to achieve?<\/h3>\n<div>&nbsp;<\/div>\n<p data-end=\"1107\" data-start=\"920\" style=\"color: #000000; font-size: medium;\">The bill would require certain entities to demonstrate effective presence and operations in Panama, particularly where they earn passive income from abroad.<\/p>\n<p data-end=\"1312\" data-start=\"1109\" style=\"color: #000000; font-size: medium;\">In practical terms, the proposal seeks to ensure that companies can evidence real economic activity rather than merely a formal structure used for international tax planning purposes.<\/p>\n<p data-end=\"1505\" data-start=\"1314\" style=\"color: #000000; font-size: medium;\">The measure is aligned with global trends towards a more rigorous analysis of economic substance, beneficial ownership and the operational reality of international corporate structures.<\/p>\n<p data-end=\"1505\" data-start=\"1314\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h3 style=\"color: #000000; letter-spacing: normal;\">Who would it apply to?<\/h3>\n<div>&nbsp;<\/div>\n<p data-end=\"1735\" data-start=\"1531\" style=\"color: #000000; font-size: medium;\">Based on the proposal as known to date, the obligations could fall on entities belonging to multinational groups that earn foreign-source passive income, including:<\/p>\n<ul data-end=\"1875\" data-start=\"1737\" style=\"color: #000000; font-size: medium;\">\n<li data-end=\"1765\" data-section-id=\"18d63cf\" data-start=\"1737\">International holding companies<\/li>\n<li data-end=\"1792\" data-section-id=\"frv22g\" data-start=\"1766\">Investment vehicles<\/li>\n<li data-end=\"1830\" data-section-id=\"qe2o69\" data-start=\"1793\">Asset-holding entities<\/li>\n<li data-end=\"1875\" data-section-id=\"wl5f9b\" data-start=\"1831\">International corporate structures<\/li>\n<\/ul>\n<div><font color=\"#000000\" face=\"-apple-system, BlinkMacSystemFont, Segoe UI, Roboto, Oxygen-Sans, Ubuntu, Cantarell, Helvetica Neue, sans-serif\" size=\"3\"><br \/><\/font><\/div>\n<p data-end=\"2084\" data-start=\"1877\" style=\"color: #000000; font-size: medium;\">Measures of this kind have been gaining momentum in various jurisdictions seeking to be removed from tax monitoring lists or to align with international standards of transparency and tax cooperation.<\/p>\n<p data-end=\"2084\" data-start=\"1877\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h3 style=\"color: #000000; letter-spacing: normal;\">Main economic substance requirements<\/h3>\n<div>&nbsp;<\/div>\n<p data-end=\"2236\" data-start=\"2136\" style=\"color: #000000; font-size: medium;\">The elements that could be required to demonstrate economic substance in Panama include:<\/p>\n<p data-end=\"2236\" data-start=\"2136\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h4 style=\"color: #000000; letter-spacing: normal;\">Qualified human resources<\/h4>\n<p data-end=\"2386\" data-start=\"2271\" style=\"color: #000000; font-size: medium;\">Entities would need adequate and sufficient personnel to carry out their activities effectively.<\/p>\n<p data-end=\"2386\" data-start=\"2271\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h4 style=\"color: #000000; letter-spacing: normal;\">Adequate physical premises<\/h4>\n<p data-end=\"2541\" data-start=\"2424\" style=\"color: #000000; font-size: medium;\">The existence of offices, operating space or infrastructure commensurate with the activity carried out would be assessed.<\/p>\n<p data-end=\"2541\" data-start=\"2424\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h4 style=\"color: #000000; letter-spacing: normal;\">Proportionate operating expenses<\/h4>\n<p data-end=\"2696\" data-start=\"2580\" style=\"color: #000000; font-size: medium;\">The structure should reflect costs and expenses consistent with the volume and nature of its operations.<\/p>\n<p data-end=\"2696\" data-start=\"2580\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h4 style=\"color: #000000; letter-spacing: normal;\">Effective strategic decision-making in Panama<\/h4>\n<p data-end=\"2905\" data-start=\"2753\" style=\"color: #000000; font-size: medium;\">One of the most relevant points would be demonstrating that corporate and strategic decisions are genuinely taken within the Panamanian jurisdiction.<\/p>\n<p data-end=\"2905\" data-start=\"2753\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<p data-end=\"2905\" data-start=\"2753\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h3 style=\"color: #000000; letter-spacing: normal;\">Potential implications for Colombia<\/h3>\n<p data-end=\"3108\" data-start=\"2948\" style=\"color: #000000; font-size: medium;\">From a Colombian perspective, initiatives of this kind could have significant implications for the review and audit of international structures.<\/p>\n<p data-end=\"3178\" data-start=\"3110\" style=\"color: #000000; font-size: medium;\">Matters that could become more relevant include:<\/p>\n<p data-end=\"3178\" data-start=\"3110\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h4 style=\"color: #000000; letter-spacing: normal;\">Beneficial ownership<\/h4>\n<p data-end=\"3354\" data-start=\"3206\" style=\"color: #000000; font-size: medium;\">Tax authorities could look more closely into identifying the real beneficiaries behind certain international structures.<\/p>\n<h4 style=\"color: #000000; letter-spacing: normal;\"><\/h4>\n<h4 style=\"color: #000000; letter-spacing: normal;\">Application of anti-abuse rules<\/h4>\n<p data-end=\"3541\" data-start=\"3391\" style=\"color: #000000; font-size: medium;\">The existence\u2014or absence\u2014of economic substance may become a key element in analysing potential tax abuse schemes.<\/p>\n<p data-end=\"3541\" data-start=\"3391\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h4 style=\"color: #000000; letter-spacing: normal;\">DIAN audits<\/h4>\n<p data-end=\"3745\" data-start=\"3582\" style=\"color: #000000; font-size: medium;\">DIAN could step up its review of cross-border transactions and corporate structures with international components.<\/p>\n<p data-end=\"3745\" data-start=\"3582\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h4 style=\"color: #000000; letter-spacing: normal;\">Economic substance and operational reality<\/h4>\n<p data-end=\"3943\" data-start=\"3792\" style=\"color: #000000; font-size: medium;\">Companies will need to assess whether their international operations reflect genuine, consistent and documented activity vis-\u00e0-vis the tax authorities.<\/p>\n<p data-end=\"3943\" data-start=\"3792\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h3 style=\"color: #000000; letter-spacing: normal;\">What should companies review?<\/h3>\n<div>&nbsp;<\/div>\n<p data-end=\"4129\" data-start=\"3986\" style=\"color: #000000; font-size: medium;\">In light of this potential regulatory scenario, business groups and international structures are advised to review matters such as:<\/p>\n<ul data-end=\"4459\" data-start=\"4131\" style=\"color: #000000; font-size: medium;\">\n<li data-end=\"4206\" data-section-id=\"7cvyy7\" data-start=\"4131\">The current level of economic substance of their international entities<\/li>\n<li data-end=\"4287\" data-section-id=\"7s8lh6\" data-start=\"4207\">Documentation relating to functions, operations and decision-making<\/li>\n<li data-end=\"4369\" data-section-id=\"3acxe7\" data-start=\"4288\">Consistency between operational reality and the tax planning implemented<\/li>\n<li data-end=\"4459\" data-section-id=\"14a9f12\" data-start=\"4370\">Potential risks vis-\u00e0-vis domestic and international tax authorities<\/li>\n<\/ul>\n<p data-end=\"4624\" data-start=\"4461\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<p data-end=\"4624\" data-start=\"4461\" style=\"color: #000000; font-size: medium;\">A preventive review can help identify contingencies and strengthen companies\u2019 positions ahead of future regulatory or tax requirements.<\/p>\n<p data-end=\"4624\" data-start=\"4461\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h3 style=\"color: #000000; letter-spacing: normal;\">Final considerations<\/h3>\n<div>&nbsp;<\/div>\n<p data-end=\"4832\" data-start=\"4654\" style=\"color: #000000; font-size: medium;\">The bill introduced in Panama reflects a global trend towards greater requirements of transparency, economic substance and traceability in international structures.<\/p>\n<p data-end=\"4832\" data-start=\"4654\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<p data-end=\"5057\" data-start=\"4834\" style=\"color: #000000; font-size: medium;\">Although the initiative is still under discussion, companies with operations or structures linked to Panama should begin assessing its potential impact from a corporate, tax and operational perspective.<\/p>\n<p data-end=\"5057\" data-start=\"4834\" style=\"color: #000000; font-size: medium;\">&nbsp;<\/p>\n<h5 style=\"color: #000000; font-size: medium;\">At Ca\u00f1\u00f3n Asociados, we will continue to monitor the progress of this initiative and its implications for business groups and international structures with an impact in Colombia.<\/h5>\n<\/p><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Panama recently introduced a bill seeking to strengthen the \u201ceconomic substance\u201d requirements applicable to certain entities\u2026<\/p>\n","protected":false},"author":2,"featured_media":2830,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[11],"tags":[],"class_list":["post-2648","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-planning-and-consulting","entry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Panama&#039;s New Economic Substance Rules | Ca\u00f1\u00f3n Asociados<\/title>\n<meta name=\"description\" content=\"Panama has introduced a bill to strengthen economic substance requirements for multinational group entities earning foreign passive income. 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