Panama tax for companies: territorial, and the 2027 change
A Panama company pays no Panama tax on income from business done abroad; only Panama income is taxed, at 25%. With no Panama operations, its dividends aren't taxed in Panama either.
From 2027, Law 526 charges 15% on foreign passive income of companies in international groups without substance in Panama.
Panama has taxed only Panama income for decades, and most pages stop there. Two things are newer: Law 526 of May 2026 taxes some foreign passive income from 2027, and the EU took Panama off its blacklist. Here's how both touch a company run from abroad, from the tax office's own pages and the Official Gazette.
Key takeaways
- Panama taxes only income from Panama. Business done, used or felt abroad isn't, even if it's directed from Panama.
- Company tax on Panama income is 25%; dividends from it carry 10%.
- A company with no Panama operations and no Panama income pays no dividend tax on current rules.
- From 2027, Law 526 charges 15% on foreign passive income of companies in international groups, unless they have substance.
- Every company pays the tasa única of B/.300 a year; three unpaid years suspend it.
- The EU moved Panama off its blacklist onto the watch list, as at 9 October 2026.
Panama territorial tax: which income is taxed
The test is where the business happens, not where the company or the customer is. Pick the kind of income.
The rule comes from article 694 of the Fiscal Code. Your own country may tax income Panama doesn't.
Where the business happens decides it, even if it's directed from Panama.
Panama dividend tax: 10%, 5% or nothing
| Dividend paid from | Panama tax |
|---|---|
| Panama-source profit | 10% |
| Foreign-source or export profit, company with a Panama operating notice | 5% |
| A company with no Panama operations and no Panama income | 0% |
A company that does owe dividend tax but pays out less than 40% of its profit pays a complementary tax on the gap, 4% of after-tax profit at most, credited later. The withholding is filed on Form 07 within 10 days of the payout.
No Panama operations, no Panama income, no dividend tax.
Panama Law 526: the 15% on foreign passive income
Law 526 of 28 May 2026 reaches companies in a group with entities in other countries, from tax year 2027. Their foreign dividends, interest, royalties and gains pay a flat 15% unless they have real substance in Panama.
- A single company owned by you, earning from its own work and sales abroad
- A company with no links to entities in other countries
- A Panama company holding shares in a company abroad, or owned by one
- Passive income from that group: 15%, and a yearly Panama return
- Unless it has paid staff and premises in Panama; pure holding companies only need those two
A single company owned by you sits outside Law 526. A group may not.
Panama tasa unica and the yearly records duty
Work out the yearly government tax and when it's due.
A company with no Panama operations still keeps accounting records for 5 years and gives them to its resident agent by 30 April each year; the agent reports to the tax office by 15 July. Fines run from B/.5,000. The full calendar: Panama annual fees and filings.
B/.300 a year, and records to the resident agent by 30 April.
If the company does business in Panama
Sell in Panama and the 25% and 7% ITBMS come in.
Is Panama a tax haven?
Panama left the FATF grey list in October 2023. The EU Council's list of 9 October 2026 has it off the blacklist and on the watch list, pending an OECD Global Forum review. No 15% minimum tax law for large groups was found.
Compare it with the other zero tax places in our tax haven guide.
Off the EU blacklist, on the watch list, off the FATF grey list.
Panama tax questions, answered
What is the corporate tax rate in Panama?
Does a Panama company pay tax on foreign income?
Does a Panama company need to file a tax return?
How much is the Panama tasa unica?
Is Panama on the EU blacklist?
Do I pay tax in Panama if I live elsewhere?
What does your Panama company include?
Changelog
- 10 November 2026: first published.
- 13 November 2026: official sources linked in the text.
A Panama company with directors and yearly records included.
US$1,590 to start, then US$1,090 a year.