The only income which is taxable in Panama is that derived from the territory of Panama. The sale of a product and service to persons and entities in Panama are obviously derived from the territory of Panama therefore they are taxable. However the sales of products or services to anyone outside
the territory of Panama is not taxable.
For businesses which bill for products which are not within the territory of Panama do not generate taxable income. Likewise company´s in Panama which facilitate commercial activities outside of Panama are not taxable. Some businesses that operate within the territory of panama like call centers
are regulated by special regimes and are exempt from some taxes.
Obviously rent from real estate or sale of real estate in Panama is taxable. Likewise commissions and interest which arise from the Financing of Business in Panama are also taxable.
Interest on bank accounts that are in Banks which are licensed in Panama, are also exempt from tax in Panama. As are interest on dead instruments registered on the stock Exchange. Likewise Financing companies not residented in Panama, which relieve interest or commissions payable by Panamanian Banks as well as the constructions of homes, businesses, are exempt from tax. To arrive at taxable income one deducts
foreign income from gross income.
Obvoiusly subject to accounting rules and proper documentations Business expenses are also deductible. In a series of stops starting in 2010 the ratio of taxation has been reduced to 30% to the current 25%. Certain businesses such as telecomunications, banks, etc. Will not reach the 25% until 2014 and for 2013 will pay 27.5% . Any company which is 40% or more owned by the government will continue paying 30 % tax. Agribusiness and SME´s have different and lower rates of tax.
All residents of Panama for more than 183 days, a year who recieve Panamanian Income are subject to the same regime here in explained.The first US11,000.00 of income is not subject to tax the next tranche from US$11,000.00 to US$50,000.00 is taxed at15% and income above US$50,001.00 pay a tax of 25%. There are varios deductions such as mortgage interest on your principal interest up to $15,000.00 anually. Health insurance premiums are deductible, private pentions contirbutions up to 10% of your gross income up to a maximum of $15,000.00 anually are deductible and interest on student loans for education in Panama are deductible.
| Taxable Incomes: |
Pays a Tax % of: |
| $0.00 - $11,000.00 |
Is not subject to tax. |
| $11,001.00 - $50,000.00 |
Is Taxed at 15% |
| $50,001.00 – Above |
Is Taxed at 25% |
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De Levante y Asociados
