The IMG or GloBE and its implications

Since 2017, the G20 and the OECD have collaborated on a project to address the erosion of the tax bases and profit shifting, which is based on two fundamental pillars.

Pillar One, which seeks to distribute the results obtained by multinational companies, allowing them to be taxed where their clientele is located, and Pillar Two, which proposes establishing an effective global minimum tax of 15% (IMG or GloBE).  For the IMG to be applicable to a company the joint billing (Headquarters and subsidiaries) must reach 750 million euros or its equivalent, amount which is subject to review in 2030.

The implementation of the IMG seeks greater tax and reputational certainty. However, it also presents challenges for governments in the application of international agreements and treaties, requiring adjustments in national tax legislation, as well as for companies which will have to adjust their guidelines to comply with the new regulations.

Currently in Panama, the Directorate of International Financial and Fiscal Strategy and the General Directorate of Revenue are currently studying the possible ways of implementing the IMG, without affecting the legal security of close to 10 local Panamanian capital companies and 60% of foreign capital companies located in the country.