Jurisdictions - Panama

Key Points:

- An individual is considered resident if he/she is present in Panama for more than 180 days in any one tax year.

- Residence has to be officially recognised by the Government.

- Income such as wages and salaries are treated as originating from a source located within Panamanian territory – even though such personal services may be physically and actually rendered both within and outside Panamanian territory – if the individual taxpayer resides in the Republic of Panama for at least 70% of the calendar days of any given year.

- Other income (e.g. dividends, pension payments and interest) is not covered by the new rule. 

- Individuals have a personal allowance of PAB800 (1,600 for a married couple filing together), plus PAB250 for each dependent.

- Mortgage interest is deductible up to PAB15,000 per year.

- Employers pay 10.75% of salaries and wages, plus 1.5% educational tax.

- Exports are VAT zero-rated, however there are some exemptions.

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