The Panama corporation tax structure provides a great fiscal platform for doing offshore business, because Panama has a territorial tax system, meaning that offshore income (income derived from activities outside of Panama) is not taxed by the Panamanian government.
Non-resident Offshore Panama Corporations offer some of the following tax advantages:
- No Income Tax: Panama corporations do not pay taxes on offshore income derived from sources outside of Panama.
- No Capital Gains Tax: Panama corporations do not pay capital gains taxes on gains resulting from the purchase & sale of securities transacted outside of Panama (for example, the purchase and sale of publicly traded securities on non-Panamanian stock markets).
- No Interest Income Tax: Panama corporations do not pay taxes on any bank interest income earned either inside or outside of Panama (for example, there is no tax on interest earned from savings accounts or certificates of deposit in Panama).
- No sales tax: Panama corporations do not pay taxes on product or service sales that are conducted outside of Panama.
- No Tax on Issuance of Corporate Shares: Panama corporations do not pay taxes on issuance of shares, whether bearer or nominative.
- No dividend tax to shareholders: Shareholders of non-resident offshore Panama corporations do not pay taxes on dividends, for income generated from sources outside of Panama.
Flat Annual Panama Corporate Franchise Tax
The only tax paid by non-resident offshore Panama Corporations is the flat annual corporate franchise tax of US$300 (referred to as the “tasa unica”).
According to the Law, the corporate franchise tax payment deadlines are as follows;
|Incorporation Date:||Tax Payment Deadline:|
|From 1 of January to June 30:||July 15|
|From 1 of July to December 31:||January 15|
Late Payment Penalty:
If the flat annual corporate franchise tax (“tasa unica”) is not paid on or before the due dates mentioned above, the entity will be charged a late penalty of US$50 per year that the tax is not paid.
Second Late Payment Penalty:
If the flat annual corporate franchise tax (“tasa unica”) is not paid after two “deadline” periods, the entity will be charged a second late penalty of US$300 per year for every additional “deadline” period missed thereafter.
The corporate franchise taxes and late penalties mentioned above applies to all “entities” (Panama corporations, Panama foundations, or Panama trusts) registered at the public registry of Panama.
Disclaimer: *The Panama corporation tax information contained on this page is for informational purposes only and should not be relied upon for any offshore tax consulting or otherwise any offshore tax advisory services. A professional offshore tax advisor should be hired for any and all offshore tax advisory or offshore tax consultations on offshore taxes or related issues involving offshore tax planning. The law firm POLS shall not be held liable for any information contained within this website that may be out dated, incorrect, or otherwise misused by the reader in any way for tax abuse. The reader takes full responsibility for all decisions relating to structuring his or her business affairs.