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Taxation in Panama

  • Incorporation time: 9 days
  • Shelf companies: Yes
  • Accounting: Yes
  • Secretary: Yes
  • Nominee Shareholder: Yes
  • Nominee director: Yes
Tax 0%
1 USD = 0.73 €

Panama’s Tax Rates

Corporation tax is levied at 27.5%, with capital gains being taxed as profits. However, it is possible to deduct from corporation taxes operating losses, payments to foreign subsidiaries and some taxes.

Consumer tax is 7%, except for tobacco (15%) and alcohol (10%). Products exempt from VAT include medication, staple foodstuffs, exports, commercial services, petrol, books and agricultural raw materials.

Personal income tax is progressive and is levied at the following rates:

Personal income (PAB) Tax rate
0 to 9,500 0%
9,501 to 12,000 20,5%
12,001 to 15,000 21%
15,001 to 20,000 23%
20,001 to 30,000 24%
30,000 and above 25%

The following are tax-deductible: medical expenses, donations to charities, interest on loans, loans for studies and loans for housing improvements. An expatriate relocating to Panama will be taxed at 17% if he resides in the country for at least 180 days every year.

Link : Directorate-General for Tax Revenue 

Accounting Principles in Panama

The Panamanian accounting rules follow the International Financial Reporting Standards and the fiscal year runs from 1 January to 31 December. The accounts of the company must contain: a balance sheet of all assets and equipment, a profit and loss account, the management accounts and appendices.

There is no obligation to publish the accounts in Panama; however, companies generally keep a journal, a book, a statement and financial analyses.

All accounts must be audited.

National Directorate of Accounting
College of Accountants of Panama
Association of Authorized Accountants of Panama

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