🇵🇦 Taxes · Panama
Taxes in Panama
Panama uses territorial taxation: only income from sources inside the country is taxed.
Panama applies territorial taxation: only income from sources within Panama is taxed, and income earned abroad is disregarded.
How the tax system works
Panama uses the territorial principle: only income from sources in Panama is taxed, while income earned abroad is not.
Rates for individuals and companies
Personal income tax runs from 0% to 25% depending on the size of the income. Corporate income tax is 25%. The VAT rate is 7%.
Social contributions
Social contributions for employees are 9.75%, plus an education contribution of 1.25% for employees. Property tax is up to 1%.
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What to know about taxes in Panama
Territorial principle
Only income from sources in Panama is taxed - income earned abroad is not taxed at all.
Progressive personal income tax
Personal income tax runs from 0% to 25% depending on the amount of income.
Low VAT
Panama's VAT rate is 7%, lower than in many countries in the region.
Moderate property tax
Property tax in Panama is up to 1%.
FAQ
Is income earned abroad taxed?
What is the personal income tax rate in Panama?
What are the corporate income tax and VAT rates in Panama?
What social contributions do employees pay in Panama?
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