TOURISM PROGRAM (Excerpt)

Decree Law #8 14 June 1994, #4 10 February 1998

- 20 years exoneration from real property taxes on land or any improvements owned and being used for tourist activities.

- Exoneration from any taxes or assessment on capital.

- 15 years full exoneration from the payment of income taxes from tourism activities.

- Exoneration from warfare and 20 years exoneration from duties, contributions, taxes or fees on the use of piers, airports, heliports owned, built or repaired by the tourism Co. (The Government of Panama may use these facilities free of charge).

- 20 years exemption from payment of income taxes on any interest earned by creditors in operations for investing in public lodging establishments.

- 20 years exoneration of import taxes and sales taxes (ITBM) for:

Materials, equipment, fixtures, furnishings, spare parts, vessels, automobile vehicles (min. capacity of 8 pax), automobile vehicles 4X4 (min. capacity of 5 pax, ecotourism only), provided any or all items described are used for the tourism project and is not available in Panama in quantity, quality or equal price.

- An annual rate of 10 % shall be allowed for real property depreciation, not including cost of land.