Panama taxes for natural persons are quite low compared to other countries, which makes it an attractive country to move personal and commercial operations.
The personal tax is as follows:
- The first $ 11,000.00 is exempt from paying tax.
- Income from $ 11,001.00 to USD $ 50,000.00 pay 15% within this tranche.
- Income over $ 50,000.00 pays $ 5,850.00 plus 25% of the surplus over $ 50,000.00. Business
Business income tax is a 25% rate.
Taxes are applied on the sale of products or services that are carried out in the territory of Panama, commercial activities carried out by Panama Companies abroad are exempt from paying this tax.
Double taxation are treaties that Panama has with countries to avoid double taxation.
To prove that Panama is the tax residence, you must request a Certificate of Tax Resistance.
Tax Residence Certificate
The residential tax certificate is the document that certifies a person, whether natural or legal person, as a tax resident of the Republic of Panama and is issued only by the General Directorate of Income.
This certificate is only applicable to countries that have signed Double Taxation treaties with Panama.
To prove tax residence in Panama, the following considerations must be presented:
- Hold business meetings on the means of management and administration with the board of directors in Panamanian territory.
- Decisions on the means of direction and administration are made by a third party resident in Panamanian territory who has been empowered by the members of the board of directors.
- Legal persons that carry out commercial activities in Panamanian territory as long as the main office is located in the Republic of Panama.
The basic requirements established by the DGI for the issuance of the Certificate of Fiscal Residence in the Republic of Panama are the following:
- Identification of the applicant.
- Specification of the tax treaty or agreement that protects you.
- Original certificate from the Public Registry, in the case of legal persons.
- Copy of the identity card or passport of the applicant or the Legal Representative.
- Power of attorney authenticated in a circuit public notary’s office, in the case of legal persons.
- Evidence relevant to the criteria argue
Countries that currently have Double Taxation Agreements with Panama are:
- KOREA SOUTH
- UNITED ARAB EMIRATES
- GREAT BRITAIN AND IRELAND OF NORTHERN
- CZECH REPUBLIC
Tax certification is part of the strategy to legally reduce taxes for international business owners today.