Panama

The movable goods and services transfer tax (ITBMS) in Panama is essentially a value-added tax (VAT). The general tax rate is 7%, but certain items have higher rates, such as alcoholic beverages and hotel accommodations, which are taxed at 10%, and tobacco products, which are taxed at 15%. ITBMS is applied based on value-added through a system of tax credits and tax debits, which are calculated on taxable transactions. Exported goods are not taxed, and businesses may recover ITBMS on export-related costs. Non-taxed items include medical services and transportation, although these do not produce ITBMS credits.

In Panama, the corporate income tax (CIT) rate is 25%. The CIT return must be filed within three months after the fiscal year ends, with the final tax payment also due within the same three-month period. Panama requires estimated tax payments to be made six, nine, and twelve months after the end of the taxable year to ensure that taxes are paid in advance throughout the year.

Panama's personal income tax (PIT) has a headline rate of 25%. Individuals are required to file PIT returns by March 15, with the final payment due by March 31. Panama mandates that estimated payments are made in three equal installments on June 30, September 30, and December 31, allowing taxpayers to spread their payments across the year.

In Panama, withholding tax (WHT) rates vary depending on the type of income and whether the taxpayer is a resident or non-resident. For residents, dividends bear 5%, 10% or 20%, and interest and royalties bear no WHT. For non-residents, the applicable WHT rates are 5%, 10%, and 20%, with certain types of income facing a rate of 12.5%. Panama taxes income on a territorial basis: Panama-source income is taxed, and foreign-source income generally is not.

Panama imposes an immovable property tax on real estate at rates between 0% and 1%, depending on the value and usage of the property. This tax is levied annually on property owners, and the rate depends on the market value and how the property is being used, whether for personal, commercial, or other purposes.