Panama Tax Incentives

Panama is both a haven for retirement and those wanting to invest or relocate their business with U.S. based income offshore. The following is a summery of special text incentives offered by the Panama government.

  • Income tax only applies to Panamanian-sourced income. This rules applies to both Panamanian citizens and temporary residents. Relocate your business with U.S. source income, for example a call center and pay no income tax for income earned outside of Panama.
  • There is No Tax on inheritance or estate in Panama.
  • Income from rental properties is taxed up to 27% and the highest bracket applies to annual income that exceeds $30,000.
  • A 15 year income tax exemption is available for businesses that invest in a special “tourism zone”.
  • A minimum $50,000 investment ($300,000 in an urban area) in a tourist related businesses such as hotel, bed and breakfast or restaurant can qualify for a 20 year exemption on real estate taxes and import duties on materials such as furniture, equipment and vehicles.
  • Property tax only applies on land valued above $30,000. The top rate is 1% on property with a value exceeding $75,000.
  • New construction of a single family home, apartment building, or other residential unit may qualify for a twenty year property tax exemption for the value added of construction. Property tax on the original land may still apply, and the benefit may be transferred with the sale of the property.

This information is a general summary of complex tax issues, is subject to change, and is not intended to be used as a guide to financial planning. Consult a tax professional before making any financial decisions.

Detailed Summary of Panama Taxation

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