Ferguson & Ferguson

Panama Personal Tax

Table of Contents

About the Panama Personal Tax

The tax is applicable as follows:

  • The first US$11,000.00 are exempt from income tax.
  • Income perceived between US$11,000.00 and up to US$50,000.00 is taxable at a rate of 15%.
  • For the first US$50,000.00 perceived is US$5,850.00, and any excess of the income thereof is taxed at a rate of 25%.

Tax Residence Certificate

In Panama, the tax residency certificates are only applicable to residents of countries with which Panama has subscribed to Double Taxation Treaties.

Currently, these countries are Mexico, Barbados, Qatar, Spain, Luxemburg, Netherlands, Singapore, France, Korea, Portugal, Ireland, Czech Republic, United Arab Emirates and United Kingdom.

Individuals must prove their tax residency based on evidence that is regulated and duly acknowledged by the Authority.

The legal person may prove their tax residency in Panama in two (2) ways, evidencing the following:

  1. That it has means of direction and administration in the Republic of Panama.
  2. That it has a Notice of Operations.

In the case of a natural person, the tax residency certificate may be obtaining proving any of the following assumptions:

 
  1. That it has economic interests in Panama, submitting an original letter of employment issued by a qualified person of the employer company of the foreigner. In case of independent investors, a copy of the income tax return in Panama must be submitted and prove that the applicant has stayed in Panamanian territory for more than 183 days, alternate or continuous, during a tax year or in the immediately preceding year.
  2. That a center of vital interests of the person is maintained in the country, evidencing that the individual has established the main residence in the Panamanian territory through a lease contract or property deed and submitting a utility invoice (water, electricity, telephone) under the name of the person who requests the certificate.

 

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