Panama abides by a territorial principle as to taxation, consequently only income generated within our territory is taxable.
Income Tax for companies is set at 25% and individuals are taxed based on revenue brackets.
Aside for income tax, there are 13 other taxes and withholdings both direct and indirect. Collection is carried out by the General Income Directorate of the Ministry of Economy and Finance an entity with compulsory jurisdiction.
A dedicated Administrative Tribunal has been created to settle opposing standpoints between taxpayers and the Directorate.
Several special regimes have been created in the country to promote trade, manufacturing, exports, hydrocarbons, and alternate energy sources.
Focused on ridding itself of its tax heaven stereotype, over the past years Panama has actively signed several tax information exchange agreements, and double taxation treaties, successfully exiting OCDE’s Grey List, and positioning itself advantageously as grows.
Our firm has a Taxation Department to assist our clients in developing effective legal structures, and advise them on the constantly changing rules of this area of practice.
We have been responsible for relocating several logistics and manufacturing companies into the Panama Pacific Special Economic Zone, who now benefit from a tax-free operation based on their activities. Similarly, we have assisted fuel companies to establish themselves in Fuel Free Zones, from which they can import, trade, and export fuel products also exempt from taxation. We have also assisted clients into entering the Colon Free Zone Regime.