- Brackets updated
migrated from the production database; research reasoning not recorded.
Top income tax
25.0%
Territorial system
Corporate tax
25.0%
ITBMS
7.0%
standard rate
Tax residency
183 days
17 tax treaties
Panama tax profile
Data year: 2026
- Tax system
- Territorial Panama taxes only Panamanian-source income under the territorial principle. Foreign-source income is generally exempt for individuals and companies, but dividend tax may still apply when profits are distributed. From fiscal year 2027, entities in multinational groups that earn listed foreign-source passive income must meet economic-substance and reporting rules (Ley 526 de 28 de mayo de 2026; Decreto Ejecutivo 32 de 2026) or pay a definitive 15% on the net taxable amount of that passive income.
- Top PIT rate
- 25.0%
- Corporate tax rate
- 25.0%
- ITBMS
- 7.0%
- Capital gains tax
- 10.0% Real estate: 2% transfer tax plus a 3% advance on gross sale value or cadastral value (may be definitive); otherwise tax is 10% on the gain with the advance credited. Securities: 5% WHT on gross proceeds with optional reconciliation to 10% on the gain. Other fixed assets: 10% on the gain.
- Social security (employee)
- 9.8%
- Social security (employer)
- 13.3%
- Dividend withholding
- 10.0%
- Interest withholding
- 12.5%
- Royalty withholding
- 12.5%
- Treaty count
- 17
Income tax brackets
Corporate
| Bracket min | Bracket max | Rate |
|---|---|---|
| USD 0 | and above | 25.0% |
Personal income
| Bracket min | Bracket max | Rate |
|---|---|---|
| USD 0 | USD 11,000 | 0.0% |
| USD 11,000 | USD 50,000 | 15.0% |
| USD 50,000 | and above | 25.0% |
Special regimes (2)
| Name | Rate/amount | Duration | Status |
|---|---|---|---|
| Sede de Empresas Multinacionales (SEM) Multinational headquarters regime allowing companies to establish regional headq... | No rate or amount recorded | Duration not recorded | Active |
| Free Trade Zones (Zona Libre de Colón) The Colón Free Trade Zone is the largest free trade zone in the Western Hemisphe... | No rate or amount recorded | Duration not recorded | Active |
Tax flags
Territorial Exemption
Tax residency
- Days threshold
- 183 days
- Residency rules
- DGI and PwC treat an individual as resident when physically present and earning income in Panama for more than 183 days in the calendar year. Tax residence does not extend the territorial base to foreign-source income.
- Exit tax
- No
- CFC rules
- No
Filing information
- Fiscal year
- 01-01 – 12-31
- Filing deadline
- March 15
Sources
- DGI — Tarifa del Impuesto sobre la Renta (accessed Oct 9, 2026) PIT art. 700 brackets; general CIT 25% from 2011; 30% where State holds >40% of shares
- DGI — Convenios para evitar la doble imposición (FAQ) (accessed Oct 9, 2026) 17 income tax treaties in force; treaty list
- PwC Panama Tax Summary (accessed Oct 9, 2026) Territorial system, WHT, ITBMS, CSS rates, CAIR, foreign passive income substance, filing dates