Country topic
Tax in Panama
Panama's instruction sheet for the personal income tax return has a line that subtracts income of foreign source (line 18, citing paragraph 2 of Tax Code article 694). That is the official basis for describing Panama as taxing on a territorial basis, though the sheet does not use the word. We found no tax authority page on whether pay for work you do while physically in Panama for a foreign employer counts as foreign-source, so that is unknown. The remote-worker visa is an immigration status and does not set your tax treatment. [T1] [T2] Under Tax Code article 762-N you are tax resident in Panama if you are physically present for more than 183 days, continuous or not, in the current or the immediately preceding fiscal year, or if you set up permanent housing with a centre of vital interests there (family or economic ties). Holding a residence permit does not on its own make you tax resident. The tax authority issues a tax number (NT) to foreigners; it asks for your passport, an original migration movement record and proof of taxable income or an accountant's certificate. [T3] [T4]
What we found
The research, with its sources.
Research information, not advice. Rules change, so check the source before you act on one.
- Panama's instruction sheet for the personal income tax return has a line that subtracts income of foreign source (line 18, citing paragraph 2 of Tax Code article 694). That is the official basis for describing Panama as taxing on a territorial basis, though the sheet does not use the word. We found no tax authority page on whether pay for work you do while physically in Panama for a foreign employer counts as foreign-source, so that is unknown. The remote-worker visa is an immigration status and does not set your tax treatment. [T1] [T2]
- Under Tax Code article 762-N you are tax resident in Panama if you are physically present for more than 183 days, continuous or not, in the current or the immediately preceding fiscal year, or if you set up permanent housing with a centre of vital interests there (family or economic ties). Holding a residence permit does not on its own make you tax resident. The tax authority issues a tax number (NT) to foreigners; it asks for your passport, an original migration movement record and proof of taxable income or an accountant's certificate. [T3] [T4]
- For taxable Panamanian income, the Tax Code rates for individuals (article 700, as amended by Law 8 of 2010) are 0% up to B/.11,000, 15% on the part from B/.11,000 to B/.50,000, and B/.5,850 plus 25% on the part above B/.50,000. This is the 2010 text; later amendments were not checked, and what you owe depends on your situation. Law 926 of 28 May 2026 adds economic-substance rules for entities in multinational groups; the articles we read do not address individuals. [T5] [T6]
- The tax authority's list shows 17 double taxation conventions in force: Mexico, Barbados, Qatar, Spain, Luxembourg, the Netherlands, Singapore, France, Korea, Portugal, Ireland, the Czech Republic, the United Arab Emirates, the United Kingdom, Israel, Vietnam and Italy. None is with the United States, Canada, Australia or New Zealand, and the IRS, Finance Canada, Australian Treasury and New Zealand Inland Revenue lists do not include Panama. The tax authority's page carries a March 2017 update note, so the home-country lists are the cross-check. [T7] [T8] [T9] [T10] [T11]
- Information exchange differs by passport. The US and Panama have a tax information exchange agreement in force since 2011 (on request). Canada and Panama signed one on 17 March 2013, in force since 6 December 2013. Australia's Treasury lists no such agreement with Panama, and neither does New Zealand's Inland Revenue; Australia (in force 1 December 2012) and New Zealand (1 March 2014) are on the OECD's list of the multilateral Convention on Mutual Administrative Assistance in Tax Matters, as is Panama (1 July 2017). We did not read its terms or reservations. [T12] [T13] [T14] [T15] [T11] [T16]
- US citizens generally file a US return on worldwide income wherever they live. The 2026 foreign earned income exclusion is up to $132,900, the physical presence test needs 330 full days abroad in 12 consecutive months, and you cannot take a foreign tax credit for tax on income you exclude. Foreign accounts that together exceed $10,000 at any time in the year must be reported on an FBAR. With no US-Panama income tax treaty, no tie-breaker settles a double claim. This describes the mechanism, not your bill. [T17] [T18] [T19] [T20] [T21] [T8]
- Canada, Australia and New Zealand look at ties, not days alone. The CRA treats a home, a spouse or common-law partner, or dependants in Canada as significant ties, and its deemed non-resident rule needs a tax treaty country. In Australia a person domiciled there stays resident unless the Commissioner is satisfied their permanent place of abode is outside Australia. In New Zealand you are resident with a permanent place of abode there or after more than 183 days in a 12-month period, and you stop only with no such abode and more than 325 days away in a 12-month period. [T22] [T23] [T24] [T25]
- Panama is not on the US Social Security Administration's list of agreements (archived 10 October 2026), Canada's list, New Zealand's list of eleven agreements or Australia's list of agreement countries (archived 9 September 2026), so none coordinates contributions with Panama. We found no official page saying whether remote-worker visa holders or residents must enrol with Panama's social security fund (CSS), so that is unknown. This describes the mechanism, not your bill. [T26] [T27] [T28] [T29]
The country
More on Panama.
Topics
More about Panama.
Questions about Tax in Panama.
Does Panama tax income earned abroad?
The tax authority's return has a line that subtracts income of foreign source (Tax Code article 694). No official page we found says whether pay for work done while physically in Panama for a foreign employer counts as foreign-source, so ask a Panamanian adviser. This is not tax advice.
When do I become a tax resident of Panama?
After more than 183 days in Panama, continuous or not, in the current or the immediately preceding fiscal year, or if you set up permanent housing there with family or economic ties. A residence permit on its own does not make you a tax resident.
What are Panama's personal income tax rates?
In the 2010 text of the Tax Code (Law 8): 0% up to B/.11,000 of taxable income, 15% on the part from B/.11,000 to B/.50,000, then B/.5,850 plus 25% above B/.50,000. We did not check later amendments, and what you owe depends on your situation.
Does Panama have a tax treaty with the US, Canada, Australia or New Zealand?
Panama's tax authority lists 17 double taxation conventions in force, none with these four, and their own lists do not include Panama. The US and Canada have information-exchange agreements with Panama; Australia and New Zealand list none.
Do I still owe tax at home if I live in Panama?
It depends on your passport and ties. US citizens generally file on worldwide income; the 2026 foreign earned income exclusion is up to $132,900. Canada, Australia and New Zealand look at residential ties, not days alone. None has an income tax treaty with Panama.
Sources
Where each figure comes from.
Every figure on this page links to the page we read, with the date we checked it.
- [T1] Instructions for filling in the personal income tax return (Declaración jurada de renta de persona natural), Dirección General de Ingresos, Ministerio de Economía y Finanzas (official). Checked 15 October 2026. In Spanish; an older instruction sheet. Line 18 subtracts foreign-source income under paragraph 2 of Tax Code article 694. The sheet applies the rates of Tax Code article 700 as amended by Law 8 of 2010.
- [T2] Requirements for the Short Stay Visa as a Remote Worker (Visa de Corta Estancia como Trabajador Remoto), Servicio Nacional de Migración de Panamá (official). Checked 15 October 2026. Checklist PDF (uploaded April 2026), in Spanish: the visa is created within the non-resident migratory category.
- [T3] Panama: information on tax residency, Dirección General de Ingresos, via the OECD automatic-exchange portal (official). Checked 15 October 2026. Tax Code article 762-N: more than 183 days in the current or immediately preceding fiscal year, or permanent housing and a personal connection to it; a migratory or investment-based residence permit does not automatically confer tax residency.
- [T4] Tax number (NT) for natural persons, Dirección General de Ingresos, Ministerio de Economía y Finanzas (official). Checked 15 October 2026. In Spanish: the NT is the taxpayer identification for foreigners who work independently, are salaried or sell property; requires a valid passport, an original migration movement record, and a document showing taxable income or an accountant's certificate.
- [T5] Law 8 of 15 March 2010 (tax reform), article 10: Tax Code article 700 rates for individuals, Gaceta Oficial No. 26489-A, as published by the Dirección General de Ingresos (official). Checked 15 October 2026. 0% up to B/.11,000, 15% on the part from B/.11,000 to B/.50,000, then B/.5,850 plus 25% above B/.50,000. This is the 2010 text; later changes were not checked.
- [T6] Law 926 of 2026: economic-substance rules for certain foreign-source passive income, Gaceta Oficial Digital No. 30534-B, 28 May 2026 (official). Checked 15 October 2026. The first articles read: adds economic-substance rules in the Tax Code for entities that belong to multinational groups and are set up or based in Panama. The text read does not address individuals.
- [T7] Convenios de Doble Imposición e Intercambio de Información Tributaria (tax conventions and information exchange agreements), Dirección General de Ingresos, Ministerio de Economía y Finanzas (official). Checked 15 October 2026. In Spanish; the page carries the note 'Fecha de actualización: Marzo 2017' although it also lists a 2026 agreement with Ecuador. Lists 17 double taxation conventions in force, none with the United States, Canada, Australia or New Zealand.
- [T8] United States income tax treaties, A to Z, Internal Revenue Service. Checked 15 October 2026. Panama is not listed.
- [T9] Tax treaties in force, Department of Finance Canada (official). Checked 15 October 2026. Panama is not listed.
- [T10] Income tax treaties in force, Australian Treasury. Checked 15 October 2026. Panama is not listed.
- [T11] Tax treaties: double tax agreements and tax information exchange agreements, Inland Revenue (New Zealand), Tax Policy. Checked 15 October 2026. Panama is in none of the lists of double tax agreements or information exchange agreements in force.
- [T12] Treasury: US-Panama Tax Information Exchange Agreement now in effect, US Department of the Treasury. Checked 15 October 2026. Agreement signed 30 November 2010 and in force from 2011; it covers exchange of information on request, not a tax treaty.
- [T13] Convenios de Doble Imposición e Intercambio de Información Tributaria (information exchange agreements), Dirección General de Ingresos, Ministerio de Economía y Finanzas (official). Checked 15 October 2026. Lists in-force information exchange agreements with the United States (from 18 April 2011) and Canada (from 6 December 2013), and the Convention on Mutual Administrative Assistance in Tax Matters (Law 5 of 2017).
- [T14] Entry into force of the tax information exchange agreement between Canada and Panama, Department of Finance Canada (official). Checked 15 October 2026. Notice of 6 December 2013: the agreement was signed on 17 March 2013 and entered into force on 6 December 2013. An information exchange agreement, not a tax treaty.
- [T15] Tax information exchange agreements, Australian Treasury. Checked 15 October 2026. Panama is not listed.
- [T16] Jurisdictions participating in the Convention on Mutual Administrative Assistance in Tax Matters (status of 1 September 2026), OECD. Checked 15 October 2026. Australia: amended Convention in force 1 December 2012. New Zealand: amended Convention in force 1 March 2014. Panama: amended Convention in force 1 July 2017. The terms of the Convention and any reservations were not read.
- [T17] US citizens and residents abroad: filing requirements, Internal Revenue Service. Checked 15 October 2026.
- [T18] Figuring the foreign earned income exclusion, Internal Revenue Service. Checked 15 October 2026. Tax year 2026 figure: $132,900 per person.
- [T19] Foreign earned income exclusion: physical presence test, Internal Revenue Service. Checked 15 October 2026.
- [T20] Foreign tax credit, Internal Revenue Service. Checked 15 October 2026.
- [T21] Report of Foreign Bank and Financial Accounts (FBAR), Financial Crimes Enforcement Network (FinCEN). Checked 15 October 2026.
- [T22] Determining your residency status, Canada Revenue Agency (official). Checked 15 October 2026. Lists significant residential ties (a home, a spouse or common-law partner, dependants in Canada) and secondary ties; the deemed non-resident rule applies to a resident of a country with which Canada has a tax treaty.
- [T23] Income Tax Assessment Act 1936, section 6(1), definition of "resident or resident of Australia", Federal Register of Legislation (Australian Government). Checked 15 October 2026. Compilation of 1 July 2026: includes a person whose domicile is in Australia, unless the Commissioner is satisfied that the person's permanent place of abode is outside Australia.
- [T24] Tax residency status for individuals, Inland Revenue (New Zealand). Checked 15 October 2026. More than 183 days in any 12-month period, or a permanent place of abode in New Zealand.
- [T25] Leaving New Zealand, Inland Revenue (New Zealand). Checked 15 October 2026. You become a non-resident only if you have no permanent place of abode in New Zealand and are away more than 325 days in any 12-month period.
- [T26] US international Social Security agreements, US Social Security Administration (Internet Archive copy). Checked 15 October 2026. Internet Archive capture of 10 October 2026; the live SSA page blocks automated access. The list of agreements in force (latest: Romania, 1 September 2026) does not include Panama.
- [T27] Social security agreements, Government of Canada. Checked 15 October 2026. Panama is not on the list of countries with a Canada social security agreement.
- [T28] Social security agreements, Work and Income (Ministry of Social Development, New Zealand). Checked 15 October 2026. Eleven agreements listed (Australia, Canada, Denmark, Ireland, Jersey, Guernsey, Greece, Malta, the Netherlands, South Korea, the United Kingdom); Panama is not one of them.
- [T29] International social security agreements, Australian Government, Department of Social Services (Internet Archive copy). Checked 15 October 2026. Internet Archive capture of 9 September 2026; lists 32 agreement countries and those under negotiation; Panama is not listed.