Your company’s yearly obligations in Panama
Reviewed by Hassim Patel Bhana, Managing Partner · Updated
The common mistake is confusing territorial taxation with having no obligations. Even with no Panamanian income, a company has formal duties every year. Income tax is 25% on net Panamanian-source income, and foreign-source income is not taxed in Panama — but the filings and registrations still fall due.
Key points
- Confusing 'territorial' with 'no obligations' is the mistake this guide exists to correct.
- Even with no Panamanian income, a company has formal duties every year.
- Income tax is 25% on net Panamanian-source income.
- Foreign-source income is not taxed in Panama.
- Some obligations fall due every year, and others whenever a change happens.
- Missing them is what turns a dormant company into an expensive one.
Frequently asked questions
My company has no Panamanian income. Do I still have to file?
Yes. Territorial taxation means foreign-source income is not taxed in Panama; it does not mean the company has no formal duties. Those fall due either way.
What is the income tax rate?
25% on net Panamanian-source income.
Is foreign income taxed in Panama?
No. Foreign-source income is not taxed in Panama.