Panama Taxation

Panama does no distinction if you are Panamanian or a foreigner, individuals pay income tax based on panama source income only. Any employee pays social security tax also.

If you own real estate or have capital gains, there are annual taxes for those as well. Ranging from 30%-42%.

If a corporation is conducting business onshore and offshore in Panama, it will be taxed for all onshore business conducted.

If a domestic company conducts business in Panama they are required to pay an annual Commercial License Tax based on net worth of the business, no more than 1%.

Dividends are not treated as income but subject to 10% withholding tax.