Panama — Taxes

Territorial tax — the real draw

Panama taxes on a territorial basis: income earned outside Panama is not taxed, whatever your residence status. For someone whose income comes from abroad, that is the substance behind the golden-visa headline — and a different model from a worldwide-tax country.

Panama-source personal income

Income arising inside Panama is taxed progressively: broadly 0% up to about 11,000 USD, 15% on the next band, and 25% above roughly 50,000 USD. Local salary and local business income fall here; foreign income does not.

Corporate and indirect tax

Companies pay income tax on Panama-source profits (headline 25%), while foreign-source corporate income is outside the net. The main consumption tax, ITBMS, is 7% — low by international standards.

What is not taxed

There is no tax on foreign capital gains and no wealth tax. Panama-source capital gains on property and securities are taxed under specific rules, but assets and income abroad sit outside the system.

Residency is not citizenship — and not a tax residence by default

Holding a Panama residence permit does not automatically make you Panama tax-resident, nor does it remove obligations to a country that taxes on citizenship, such as the United States. And residency is not a passport: naturalisation is a distant, discretionary step. If your aim is a second citizenship rather than a tax-efficient base, weigh a residency route like Panama, Portugal or Bermuda against the citizenship programmes, and see how each figure is checked in our methodology. Explore the residence options on our residency hub and the tax picture on our tax hub.