Private client—Panama—Q&A guide

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • Private client—Panama—Q&A guide
  • 1. How does an individual become taxable in your jurisdiction?
  • 2. What, if any, taxes apply to an individual’s income?
  • 3. What, if any, taxes apply to an individual’s capital gains?
  • 4. What, if any, taxes apply if an individual makes lifetime gifts?
  • 5. What, if any, taxes apply to an individual’s transfers on death and to his or her estate following death?
  • 6. What, if any, taxes apply to an individual’s real property?
  • 7. What, if any, taxes apply on the import or export, for personal use and enjoyment, of assets other than cash by an individual to your jurisdiction?
  • 8. What, if any, other taxes may be particularly relevant to an individual?
  • 9. What, if any, taxes apply to trusts or other asset-holding vehicles in your jurisdiction, and how are such taxes imposed?
  • More...

Private client—Panama—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to private client in Panama published as part of the Lexology Getting the Deal Through series by Law Business Research (published: October 2020).

Authors: Pardini & Asociados—Juan F Pardini; Eduardo Achurra ; Juan R Sevillano

1. How does an individual become taxable in your jurisdiction?

Residents and non-residents of Panama are subject to taxation.

Panamanian tax law is based on the territoriality principle, whereby all foreign source income is exempted, but income and revenue produced within Panama are subject to Panamanian tax.

In other words, income tax is levied on all revenue produced within the boundaries of Panama, irrespective of where the income is received and of the domicile or residence of the taxpayer. Activities that take place outside Panama are considered foreign source income and not liable to tax.

2. What, if any, taxes apply to an individual’s income?

An individual's income generated from salaries, business investments or commercial activities within Panama will be subject to income tax or taxes (capital gain, value added tax (VAT), dividend, interests, etc). 

Income tax chart

Taxable incomeTax rate
Up to USD 11,0000%
From USD 11,000 up to USD 50,00015% for the exceeding of USD 11,000 up to USD 50,000
More than USD 50,000USD 5,850 for the first USD 50,000 and a rate of 25% for any amount above of USD 50,000

3. What,

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