PANAMA Law and Practice Contributed by: María Teresa Diaz, Nadya Price and Joaquín De Obarrio, Patton Moreno & Asvat
and the Panamanian Maritime Law Association, specialises in maritime claims. 6.6 Remedies Where Proceedings Are Commenced in Breach of Foreign Jurisdiction or Arbitration Clauses In proceedings commenced in breach of a foreign jurisdiction or arbitration clause, the defendant may raise incidents or challenges that can lead to an annulment of proceedings, such as lack of jurisdiction and lack of competence. Arbitration jurisdiction is recognised at the con - stitutional level in Panama, and Law 131 of 2013 on arbitration dictates that, in disputes which include arbitration clauses, a judicial court shall decline jurisdiction in favour of the arbitral tribu - nal, and shall immediately forward the relevant file to the arbitral tribunal. 7. Ship-Owners’ Income Tax Relief 7.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies The Panamanian tax system is based on the principle of territoriality. Only income generated in the national territory is taxed, and foreign- source income is exempt. The 2010 amendments to the Tax Code intro - duced provisions in relation to transportation, and include international transportation in the portion corresponding to freight, passengers, cargo and other services, of which the origin or final destination is Panama, as an activity that shall be considered as income obtained from sources within Panama. Notwithstand - ing, it is important to indicate that the amended Tax Code specifies that these activities will be exempt if the international companies have their home port in Panama.
Income obtained within Panama from the oper - ations of ships registered abroad will also be exempt if the income obtained by Panamanian- registered vessels in that country is given a simi - lar exemption under the principle of reciprocity. The same applies to income obtained within Panama from operations of ships registered abroad by foreign persons resident, or not, in the national territory, provided that Panamanian nat - ural or legal entities are given similar treatment in the country of the nationality of that person. The sale of vessels registered under the Pana - manian flag and engaged in international trade shall be exempt from income tax. 8. Implications of Non- Performance, the IMO 2020, Trade Sanctions and the War in Ukraine 8.1 Force Majeure and Frustration Force majeure is defined as the situation pro - duced by acts of man which have not been possible to resist, such as acts of authority exercised by public officials, imprisonment by enemies, and the like. The causes for the non- performance of a shipping contract would have to fit the definition provided in order to be con - sidered force majeure. If the non-performance does not conform to this definition, is in any way foreseeable or has been stipulated in the con - tract, it will be dealt with under ordinary regula - tions or as agreed between the parties. 8.2 Enforcement of the IMO 2020 Rule Relating to Limitation on the Sulphur Content of Fuel Oil Panama is a signatory of the International Con - vention for the Prevention of Pollution from Ships, 1973 (MARPOL) and implemented the IMO 2020 regulations from 1 January 2020. The
457 CHAMBERS.COM
Powered by FlippingBook