Panama
Panama uses a territorial tax system and a USD-based economy, taxing mainly Panamanian-source income. This can be attractive for internationally sourced income when structured correctly.
Country details
- Capital
- Panama City
- Language
- Spanish
- Currency
- US Dollar (USD)
- Population
- 4.5M
- Timezone
- UTC-5
- Immigration Authority
- Official Website
Migration pathways
Residency Visas
Other Pathways
Tax situation
Territorial Tax System
- Eligibility
- Residency
- Duration
- Indefinite
- Income Tax
- 0-25%
- Foreign Income
- Exempt
- Capital Gains
- 10%
- Dividends
- 5% / 10% / 20%
- Wealth Tax
- None
- Inheritance Tax
- None
| Tax Type | Territorial Tax System |
|---|---|
| Eligibility | Residency |
| Duration | Indefinite |
| Income Tax | 0-25% |
| Foreign Income | Exempt |
| Capital Gains | 10% |
| Dividends | 5% / 10% / 20% |
| Wealth Tax | None |
| Inheritance Tax | None |
| Learn more |
Country details
Panama is a Central American logistics and services hub that operates a territorial income tax system. In practice, individuals are taxed mainly on Panamanian-source income, while foreign-source income is generally outside the Panamanian income tax net.
For individuals, Panama's progressive personal income tax applies to taxable income from Panamanian sources. PwC summarizes the brackets as 0% up to USD 11,000, 15% on income between USD 11,000 and USD 50,000, and 25% above USD 50,000. Because the system is territorial, the key planning question is often whether income is considered Panamanian-source, which depends on where activities and services are performed and other source rules.
Panama does not impose a net wealth tax or inheritance, estate, or gift taxes. Capital gains on Panamanian real estate and securities are generally taxed at 10% of the gain, with withholding advances on the gross transfer price in certain cases.
Immigration matters are handled by Panama's Servicio Nacional de Migración (SNM). Panama is not part of the EU or the Schengen Area, so residency and travel outcomes depend on the specific Panamanian permit and the passport(s) held.
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World Bank Data, Panama - Population, total (2024)·Last checked: 13/01/26
Territorial concept + PIT brackets
PwC Worldwide Tax Summaries - Panama - Individual - Taxes on personal income·Last checked: 13/01/26
CGT mechanics, no wealth / no inheritance taxes
PwC Worldwide Tax Summaries - Panama - Individual - Other taxes·Last checked: 13/01/26
Dividend WHT bands (5% / 10% / 20%)
PwC Worldwide Tax Summaries - Panama - Corporate - Withholding taxes·Last checked: 13/01/26
Immigration authority
Servicio Nacional de Migración (SNM)·Last checked: 13/01/26
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