At JVD Consultores, we understand the importance of keeping your tax obligations in order to avoid penalties and optimize your financial resources. Below, we present a guide on the types of taxes in Panama, filing and payment deadlines, and the main available tax deductions.

Types of Taxes in Panama

1. Income Tax (ISR)

Income Tax is levied on the earnings generated by individuals and legal entities. It is calculated based on net income after allowable deductions. Different rates apply depending on the type of taxpayer:

• Individuals: The progressive rate ranges from 0% to 25%, depending on annual income.
• Legal Entities: The general rate is 25% on net profits.

2. Tax on the Transfer of Movable Goods and the Provision of Services (ITBMS)

This tax applies to the sale of movable goods and the provision of services, with a standard rate of 7%. Some specific goods and services have higher rates (10% or 15%) or are exempt.

3. Other Taxes

• Property Tax: Applied to the cadastral value of real estate properties. Rates vary depending on the value and use of the property.
• Real Estate Transfer Tax (ITBI): Levied on the transfer of real estate properties at a rate of 2%.
• Import Tax: Applied to the import of goods, with rates depending on the type of product.

Filing and Payment Deadlines

1. Income Tax (ISR)

• Individuals: Must file their annual income tax return by March 15 of the following fiscal year.
• Legal Entities: The annual income tax return must be filed by March 31 of the following fiscal year. The tax payment must be made no later than March 31. Additionally, estimated income tax based on the previously paid tax must be paid in three installments by June 30, September 30, and December 31 of each year.

2. Tax on the Transfer of Movable Goods and the Provision of Services (ITBMS)

ITBMS filing and payment must be made monthly by the 15th of the month following the corresponding fiscal period.

3. Other Taxes

• Property Tax: Payment is made quarterly (April, August, and December).
• Real Estate Transfer Tax (ITBI): Paid at the time of the property transaction.
• Import Tax: Must be paid at the time of importing goods.

Tax Deductions

1. Individuals

Individuals can deduct certain expenses from their ISR taxable base, such as:

• Medical Expenses: Includes health expenses not reimbursed by insurance.
• Mortgage Interest: Interest paid on mortgage loans for the purchase of a home.
• Education: Education expenses for dependents and the taxpayer.

2. Legal Entities

Businesses can deduct expenses necessary for generating income, such as:

• Operating Expenses: Includes salaries, rents, utilities, and other operating expenses.
• Asset Depreciation: Depreciation of fixed assets can be deducted according to tax regulations.
• Provisions: Provisions for bad debts and other foreseeable expenses.

At JVD Consultores, we are committed to helping you comply with all your tax obligations efficiently and effectively. Our team of experts is at your disposal to advise you on tax planning and ensure that you make the most of the allowable deductions. Contact us for a personalized consultation and discover how we can optimize your tax situation.

For more information or inquiries, do not hesitate to contact us through our website.