Panama and China Entered into a Diplomatic Agreement Regulating Aviation (“Aviation Agreement”)

The Aviation agreement was signed by high level representatives from the governments of Panama and China on 17 November 2017 and ratified in Panama by Law 23 of 20 March 2018 respectively, although at this date it is unknown to us if China has ratified it.

The Aviation Agreement states that both countries are signatories of the Chicago Convention, and establishes open skies between both countries as well designated airlines, routes, tariffs, technical services, personnel and others.

These provisions are fairly standard in bilateral agreements of this kind.

However, the most relevant section deals with tax and custom exemptions:

1. Total exemption of taxes and duties for the aircrafts, regular equipment, fuel, and other items on board the aircrafts.
2. Total exemption of taxes and duties for regular equipment, fuel, space, parts, and other items that could be used by other aircrafts of the same airline.
3. Total exemption of taxes and duties for other airlines with whom the designated airline may have cooperation agreements.
4. Total exemption of duties for printed tickets, promotional materials and other materials.
5. Total exemption of taxes and duties for office supplies, office cars, airport use vehicles, computers, and communication equipment.
6. Total exemption of taxes and duties on income and profits of the airline.
7. Total exemption of taxes and duties on the salaries of the airline employees.

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Contributing Advisors