--- title: "Panama tax for new residents 2026: rates and regimes" url: https://settleanywhere.com/countries/panama/tax/ lang: en updated: 2026-10-10 --- # Panama tax Special regime for new residents: Panama territorial income tax. Checked against official sources on 10 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## Special regimes for new residents Special regime ### Panama territorial income tax (foreign-source income outside the tax base) Tax relief Foreign-source income: Territorial **Details** - Who: Applies to every taxpayer, natural or legal, national or foreign Panama taxes income produced inside Panama only; the taxable base of a taxpayer is gross income less foreign-source income, exempt income and deductible costs, and the DGI personal return has a separate line for foreign-source income. (sources 1, 2) #### Taxed on Taxable income = gross income minus foreign-source income, exempt/non-taxable income and deductible costs and expenses (Código Fiscal art. 695 as amended by Ley 8 of 2010); art. 694 par. 2 lists activities whose income is not treated as produced in Panama (invoicing from a Panama office for goods moving only abroad, directing from Panama transactions that are completed abroad, distributing dividends out of income not produced in Panama). #### Who it applies to - Applies to every taxpayer, natural or legal, national or foreign (art. 694 definition of contribuyente); no application, visa status or registration is needed to have foreign-source income left out of the base. - Foreign-source income is reported on line 18 of the DGI natural-person return, citing par. 2 of art. 694 of the Código Fiscal and special laws. #### Exclusions - Income from work or services performed in Panama, Panama-located assets and Panama business activity is Panama-source and taxable. - Persons domiciled abroad who receive payments for services that benefit persons in Panama and affect Panama-source income are subject to withholding on 50% of the amount remitted under art. 694 lit. e as amended by Ley 8 of 2010, unless they register as taxpayers. - Costs and expenses attributable to foreign-source income are not deductible against taxable income. #### Tax residence no residency test is recorded. #### Visas The territorial base applies regardless of visa or residence permit type; it is a feature of the income tax, not of an immigration route. #### Other taxes Social security (CSS) and educational insurance are charged on salary by separate tariffs set out in the DGI instructivo (educational insurance tariff 2.75% of the base for employees per the instructivo). Checked against official sources on 10 Oct 2026, some details partly verified [Change log](https://settleanywhere.com/changes/) ## Standard rules and foreign-source income Standard rules ### Panama personal income tax (ordinary context) Territorial **Details** - On: Net taxable income produced in Panama (territorial) - Who: Natural persons, resident or not - Limit: PAB 11k/yr ≈ $11k Natural persons pay income tax on Panama-source net taxable income at 0% up to B/.11,000, 15% on the excess up to B/.50,000, and B/.5,850 plus 25% above B/.50,000 (art. 700 as set by Ley 8 of 2010). (sources 2, 1) #### Taxed on Net taxable income produced in Panama (territorial); foreign-source income is subtracted before the tariff is applied. #### Who it applies to - Natural persons, resident or not, with Panama-source income file a sworn return within three months after the end of the fiscal year (DGI instructivo). #### Exclusions - Foreign-source income is not part of the taxable base. #### Limits - PAB 11,000 a year (≈ $11,000) · Net taxable income up to this amount is taxed at 0% (art. 700 as amended by Ley 8 of 2010); rates are as published in 2010 and not re-verified against later amendments. - PAB 50,000 a year (≈ $50,000) · Above this net taxable income the tax is B/.5,850 on the first B/.50,000 plus 25% of the excess; 15% applies between B/.11,000 and B/.50,000. #### Visas No visa-based variation in the ordinary income tax. #### Other taxes CSS social-security and educational-insurance contributions apply to salaries. Checked against official sources on 10 Oct 2026, some details partly verified [Change log](https://settleanywhere.com/changes/) ## VAT, social security and other taxes - Social security (CSS) and educational insurance are charged on salary by separate tariffs set out in the DGI instructivo (educational insurance tariff 2.75% of the base for employees per the instructivo). - CSS social-security and educational-insurance contributions apply to salaries. ## Questions people ask ### Who qualifies for Panama territorial income tax? Applies to every taxpayer, natural or legal, national or foreign (art. The territorial base applies regardless of visa or residence permit type; it is a feature of the income tax, not of an immigration route. ### How are Remote worker visa holders taxed in Panama? No special regime in our records is tied to the Remote worker visa. The standard rules apply: Natural persons pay income tax on Panama-source net taxable income at 0% up to B/.11,000, 15% on the excess up to B/.50,000, and B/.5,850 plus 25% above B/.50,000 (art. 700 as set by Ley 8 of 2010). ≈ USD figures are approximate: daily reference rates from ExchangeRate-API, dated 12 Oct 2026, refreshed when the site is updated. **Sources (2)** ## Official sources 1. [Instructivo para llenar la declaración jurada de renta de persona natural](https://web.archive.org/web/2025/https://dgi.mef.gob.pa/DC/PDF/InstructivoLlenarDeclaraci%C3%B3nJuradaRentaPersonaNatural.pdf) · Dirección General de Ingresos (DGI), Ministerio de Economía y Finanzas · checked 2026-10-10 2. [Ley 8 de 15 de marzo de 2010, Gaceta Oficial Digital 26489-A](https://web.archive.org/web/2024/https://www.gacetaoficial.gob.pa/pdfTemp/26489_A/26398.pdf) · Gaceta Oficial de Panamá · checked 2026-10-10 · published 2010-03-15