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Tax & Legal Benefits

Keep more of what you earn. Panama only taxes money made inside the country. If your income comes from abroad, the local tax bill is usually zero.

The Basics (one‑minute version)

  • Foreign income: 0 % tax
  • Profits from a Panamanian business: 25 % corporate tax
  • Personal salary earned in Panama: first US $11 000 tax‑free, then 15 – 25 %
  • Sales tax (ITBMS): 7 % on most goods and services

That’s it. Everything else is just details and paperwork.

Why Entrepreneurs Love It

  • Run a global e‑commerce or consulting company from Panama and pay no local tax on those sales.
  • Bank accounts are in US dollars—no currency swings.
  • Simple asset‑protection tools (companies + foundations) keep your wealth separate from personal risk.

Other Taxes You May Bump Into

Tax Standard Rate How to avoid / reduce
ITBMS (VAT 7 % Not charged on exports, food, medicine, or life insurance
Import Duty 0 – 15 % 0 % in Colon Free Zone & Panama Pacifico
Property Tax 0 – 1 % First US $120 k of your primary home is exempt
Capital Gains 10 % on Panama real estate Hold property in an offshore company to defer

Big Incentives (CliffsNotes)

  • Free Zones: 0 % VAT & duty + 5‑year income‑tax holiday for logistics/tech firms.
  • EMMA / SEM licenses: Run a regional HQ and pay only 5 % on local billing; expat staff pay no income tax for 5 years.
  • Green & Reforestation Projects: Up to 25 years of tax‑free profits.

Dates to Remember

  • Personal return: 15 March
  • Corporate return: 31 March
  • VAT filing & payment: 15th of every month
  • Payroll & Social Security: 15th and 30th
  • Update UBO register: within 30 days of any ownership change
Miss a deadline? Penalties start at US $50 and climb fast.

Easy Mistakes (and our fixes)

Oops What happens We do
You book foreign sales as local revenue Surprise 25 % tax bill Separate invoices & bank accounts
You ignore bank “economic substance” rules Account frozen Provide virtual office, minutes, and local director
You file VAT late 10 % surcharge + interest We file for you and set auto‑reminders

Our Flat‑Fee Plans

Plan You Get Annual Fee
Essential Corporate tax return + monthly VAT + resident‑agent US $1 200
Substance Plus Essential + virtual office address + board minutes US $2 100
Full CFO Substance Plus + monthly bookkeeping, payroll (≤5 staff) US $4 800

Add a personal tax return for US $300 per person.

Next Step

Book a free 20‑minute call—we’ll map your exact tax exposure.
Get a written action plan within 48 hours.
Relax while our accountants and lawyers keep you compliant.

Have questions? WhatsApp +507‑6933‑3333 or chat live.
Lower taxes. Fewer headaches. AskPanama.

Book your FREE consultation