Panama Passes Law Which Allows Using Crypto For Tax Payments
The Legislative Assembly of Panama passed a new bill to regulate the commercialization and use of crypto. Once signed by the President, Panama residents are able to pay their taxes and civil debts with several digital assets.
Congressman Gabriel Silva announced the passing of the new law on Twitter, after it received approval in its third debate. According to Silva, the law will help make Panama a hub for innovation and technology in Latin America.
Aprobada la Ley de Crypto de Panamá! Esto ayudará a que Panamá se vaya consolidando como hub de innovación y tecnología de America Latina!
Crypto Law approved in third debate! This will help Panama become a hub of innovation and technology in Latin America!
Panama’s neighboring country El Salvador adopted Bitcoin as legal tender in September last year, it saw a 30% increase of tourism and foreign money. Panama’s new law could have similar effect, given that the way it was written was quite similar to El Salvador.
Article 8 of the new bill reads that entities of the Republic of Panama may receive payments, directly or through payment processors or agents contracted for this purpose, for taxes, fees and other tax obligations on crypto-assets.
What the cryptocurrencies allowed for this purpose will be defined by future legislation.
Article 7 notes that a multitude of cryptocurrencies may be freely agreed upon as a means of payment for any civil or commercial debt not prohibited by the legal system of the Republic of Panama. These cryptocurrencies include Bitcoin (BTC), Ethereum (ETH), XRP, Litecoin (LTC), XDC Network (XDC), Elrond (EGLD), Stellar (XLM), IOTA, and Algorand (ALGO).
Also, according to the rules of Panama’s territorial tax system, cryptocurrencies will incur 0% capital gains tax. Given these details, the new law makes Bitcoin and other cryptocurrencies a legal tender in practice.
Congressman Silva appeared on Radio Panama, and clarified some key differences the new bill has from El Salvador’s law. For example, it doesn’t force businesses to accept crypto as payments.
“Here in Panama, we are making this optional. In addition, the El Salvador law speaks only of bitcoin. However, the plan approved in the first debate establishes the possibility of using any cryptocurrency.
We cannot and do not want to close the door to the use of more than one cryptocurrency.”
Global Bitcoin Adoption
Bitcoin has been hitting news this week as its regulatory adoption is growing. Yesterday, Central African Republic (CAR) became the first African nation and the second in the world to adopt Bitcoin as legal tender.
Brazil announced its regulatory bill for the crypto transaction, and the Cuban central bank also made a decision to start issuing licenses to virtual asset service providers.
