Panama
Central America · PA · 18 treaties
What is Panama's tax system?
Panama operates a territorial tax system. Only income sourced within Panama is subject to tax.
Tax profile
| Corporate income tax | 25% |
| Withholding — dividends | 10% |
| Withholding — interest | 12.5% |
| Withholding — royalties | 12.5% |
| VAT / GST (standard) | 7% |
| Personal income (top rate) | 25% |
| Capital gains | 10% |
| Tax system | Territorial |
| Residency threshold | 183 days |
| Exit / departure tax | No |
| CFC rules | No |
| Transfer pricing | Strict |
| Digital nomad visa | Short Stay Visa as a Remote Worker |
| Digital services tax | none |
| Global minimum tax (Pillar 2) | None |
Common questions
- What are the top personal and corporate tax rates in Panama?
- The top personal income tax rate in Panama is 25%, and the corporate tax rate is also 25%.
- How is capital gains tax handled in Panama?
- Capital gains in Panama are taxed at a rate of 10%.
- Does Panama have a digital nomad visa?
- Yes, Panama offers a nomad visa.
Tax residency
Easy to leaveWhat makes you a tax resident — and how hard it is to stop being one.
- Physical presence of more than 183 days, consecutive or alternate, in the fiscal year or in the immediately preceding fiscal year
- Having decided to establish a permanent home in Panama, understood as the person's center of vital interests (economic and/or family)
- Center of economic interests in Panama (main source of income, employment, or business activities in Panama)
- Center of family interests in Panama (immediate family residing in Panama)
Tax residency for individuals is based on 183+ days or establishing a permanent home/center of vital interests in Panama, so ceasing residency is generally achieved by spending fewer than 183 days in Panama and no longer maintaining a permanent home or main economic/family center there, with no citizenship or long-tail domicile rules.
Tax treaty network (18)
In-force double-tax treaty partners. Treaty-reduced withholding (dividends / interest / royalties) shown where the official source publishes a rate; otherwise the country's statutory rate applies unless the treaty text provides a reduction.
| Partner | Div | Int | Roy |
|---|---|---|---|
| Mexico | 7.5% | 10% | 10% |
| Barbados | 7.5% | 7.5% | 7.5% |
| Qatar | 6% | 6% | 6% |
| Spain | 10% | 5% | 5% |
| Luxembourg | 15% | 5% | 5% |
| Netherlands | 15% | 5% | 5% |
| Singapore | 5% | 5% | 5% |
| France | 15% | 5% | 5% |
| South Korea | 15% | 5% | 10% |
| Portugal | 15% | 10% | 10% |
| Ireland | 5% | 5% | 5% |
| Czechia | 10% | 10% | 10% |
| United Arab Emirates | 5% | 5% | 5% |
| United Kingdom | 15% | 5% | 5% |
| Israel | 15% | 15% | 15% |
| Italy | 10% | 10% | 10% |
| Vietnam | 12.5% | 10% | 10% |
| Romania | — | — | — |