Europe
Malta IP Box Regime
95% deduction yields effective 1.75% rate when nexus ratio is 1
Indefinite · Foreign income partly exempt
Americas
Panama Territorial Tax System
Panama's default territorial tax system generally excludes foreign-source income from taxation and has no net wealth or inheritance taxes, making it a frequent consideration for internationally mobile entrepreneurs.
Regime overview
- Status
- Active
- Type
- Default favorable
- Established
- 2010
- Duration
- Indefinite
- Highlight
- Foreign-source income not taxed in Panama
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 |
Key benefits
Foreign-source income generally not taxed in Panama
No net wealth tax and no inheritance, estate, or gift taxes
Clear PIT brackets on Panama-source income, no local income taxes
Requirements and considerations
None
Minimum presence: 183 days/year
Migration pathways
Residency Visas
Program details
Panama's personal tax system is territorial: taxation is primarily based on Panamanian-source income. PwC's tax summary describes this as a territorial concept of income and notes that citizens and residents are taxed on income earned from Panamanian sources.
For individuals, Panamanian-source income is subject to progressive income tax rates, while foreign-source income is generally exempt. This structure is often used by internationally mobile entrepreneurs and investors whose income is genuinely sourced outside Panama.
Panama also has structural non-income-tax advantages for private clients. PwC notes there are no net wealth or worth taxes and no inheritance, estate, or gift taxes. These features can simplify long-term wealth planning compared with worldwide-tax jurisdictions.
However, territorial systems are not automatic tax-free. Panama taxes capital gains on Panamanian real estate and securities (generally at 10% of gain) and uses withholding advances on some transfers. Dividend withholding also varies by source and share form. A defensible sourcing position and compliance process is essential.
Interested in Territorial Tax System?
Our tax advisors can help you evaluate eligibility requirements and optimize your tax position under this regime.
Schedule consultationOther tax regimes
Europe
Slovakia Patent Box Regime
50% exemption roughly halves corporate tax on qualifying IP income
Indefinite · Foreign income partly exempt
Europe
United Kingdom Patent Box Regime
Qualifying patent profits taxed at effective 10% corporation tax
Indefinite · Worldwide taxation
Europe
Lithuania IP Box Regime
A reduced 7% corporate income tax rate can apply to taxable profits from the commercial exploitation of qualifying IP, materially below Lithuania's standard CIT rate
Indefinite · Worldwide taxation
Population
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
Expert guidance
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