Panama Tax Guide
This page includes citations to the sources used for this entry. Always verify with official sources before making decisions.
Personal Income Tax
Tax Residency
Income Tax Rates
Foreign Income Treatment
Investment Income
Generally 10% on Panama real estate; foreign capital gains exempt
Wealth & Inheritance
Special Regimes
Practical Notes
Territorial system means foreign pensions, investment income, and remote work income generally not taxed. Dollarized economy (USD).
Business & Corporate Tax
Corporate Income Tax
Withholding Taxes
VAT / GST
Compliance & Substance
Notable Regimes
- Free Trade Zone incentives
- Colón Free Zone
- Pacifico Special Economic Zone
Data Sources
Last updated: January 2025. Always verify with official sources before making decisions.
FAQ
What is the personal income tax rate in Panama?
Panama has a top personal income tax rate of 25%. The tax structure is: Progressive 0-25% on Panama-sourced income only. See the detailed breakdown above and verify with official sources.
Do I need to pay tax on foreign income in Panama?
Panama uses a territorial system for foreign income. Foreign-source income exempt from Panamanian tax; proposed changes under discussion for passive income
What are the residency requirements for Panama?
Tax residency in Panama generally requires 183 days of physical presence. 183 days or center of vital interests; $200k residency by investment available. Always verify current rules with official sources.
Is there a wealth tax in Panama?
No, Panama does not have a wealth tax. No wealth tax
What is the corporate tax rate in Panama?
The corporate tax rate in Panama is 25%. 25% on Panama-sourced income; foreign income exempt