Law 49 of 17 September 2009 introduced major amendments with regard to the taxation of dividends or distribution payments. As of 17 September 2009, companies having a commercial and industrial permit (Aviso de Operación) must withhold tax on dividends or distribution payments at the rate of: -   10%, if the amounts paid corresponds to Panamanian source income; or -   5%, if the amounts paid corresponds to foreign source income. Note. Companies established in free zones must obtain the Aviso de Operación, and withhold tax at the rate of 5%.