Panama Commercial Taxes

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Panama Commercial Permit Tax

All persons and entities engaging in business activities within the Republic of Panama must obtain a Panama Commercial Operation Permit (“Aviso de Operacion”) which is issued by the Ministry of Commerce and Industry.  The
annual tax for the permit equals 2% of the company’s net worth with a maximum
payment of $60,000 USD.  Companies located in special economic or development zones or within free trade zones pay a rate of 1% with a maximum payment of $50,000 USD.

 

Panama Sales Tax

The Panama Sales Tax is known as the “ITBMS”.  This tax applies to imported goods, products sold or services rendered in Panama.  The importer, seller, or service provider pays this tax whereby most simply add this tax to be paid by the consumer.  Since July 1, 2010 the ITBMS increased from 5% to 7%.  Higher rates exist for the sale of alcoholic drinks (10%), tobacco products (15%), and specific services such as housing services (10%).  Exceptions to paying this tax include free trade zone transactions, power generation & distribution services, cargo and passenger transportation by sea, air, or land.  Most businesses pay the tax monthly.

 

Importing Products into Panama

Products imported into Panama which are not exempt by law or by international trade agreements are subject to import tariffs and the ITBMS tax.  The import tariffs differ by products and are set forth in a tariff line system.

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