Panama's other taxes in 2026: VAT, property and company fees explained

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You've sorted out Panama's territorial income tax. Now come the smaller bills: VAT on your invoices, tax on your flat, annual fees on your company. This guide lists each of these "specific" taxes for 2026, who pays them and how much, so nothing surprises you after the move.

Panama specific taxes in 2026: the key figures

Is this guide for you?

Read on if you…

• invoice clients from Panama and want to know when ITBMS applies;
• own, or plan to buy, an apartment or house in Panama;
• run, or plan to open, a Panamanian company and want the annual running costs.

Probably not your case if you…

• only need the income tax brackets, which are in the Panama tax landscape overview;
• import goods at commercial scale, where customs tariffs matter more than anything here.

How does ITBMS (VAT) work in Panama?

ITBMS stands for Impuesto de Transferencia de Bienes Corporales Muebles y la Prestación de Servicios – in plain words, Panama's VAT. It applies to goods sold and services provided in Panama, and to imports.

Rates

• 7% – the standard rate on most goods and services.
• 10% – alcoholic drinks and hotel or other lodging services.
• 15% – cigarettes and other tobacco products.
• Exempt – basic food, medicines, school fees, medical services, residential rent and most financial services.

Good news: 7% is one of the lowest VAT rates in the Americas.

When do you have to register?

You must register and charge ITBMS once your gross turnover from taxable activities exceeds USD 36,000 a year. Below that, registration is optional. Once registered, you file a return every month and pay the difference between the ITBMS you charged and the ITBMS you paid on business costs.

What about foreign clients and foreign software?

Here's the catch. ITBMS follows where a service is used, not just where you sit. Services used and paid for abroad are generally outside Panamanian ITBMS, but the documentation has to show it. On the other side, a registered business buying services from a foreign provider may have to self-assess the tax.

What property taxes do you pay in Panama?

The annual property tax

Panama charges a national property tax on the registered value of land and buildings. The scale is progressive, so only the slice above each threshold pays the higher rate.

These bands come from the 2017 property tax reform and its later amendments. The tax is paid to the DGI in instalments during the year.

To get the lower scale, you must register the property as your main home with the DGI. Only one property per household qualifies, and you need to actually live in it.

Buying and selling property

When property changes hands, the seller pays a 2% transfer tax on the higher of the sale price and the cadastral value. The seller also pays a 3% income tax advance on the same base. That advance is really capital gains tax, explained in our capital gains tax in Panama guide.

Buyers pay registration and notary fees, but no stamp duty on the purchase price itself. First sales of new homes follow special reduced rates instead of the 2% transfer tax.

What does a Panamanian company pay beyond income tax?

Opening a company in Panama brings a few fixed and variable charges. Most of them apply even if the company earns only foreign-source income.

1. Tasa única. Every sociedad anónima (S.A., Panama's standard corporation) pays USD 300 a year. Late payment adds a USD 50 surcharge, and repeated non-payment can get the company struck off.
2. Aviso de operación tax. Businesses operating in Panama hold a licence called the aviso de operación. They pay 2% of their capital each year, with a USD 100 floor and a USD 60,000 cap. Companies earning only foreign-source income do not need the licence.
3. Dividend tax. When a company pays dividends, it withholds 10% on profits from Panamanian sources and 5% on foreign-source or export profits of operating companies. Bearer shares, now heavily restricted, trigger 20%.
4. Complementary tax. If a company distributes less than 40% of its after-tax profit, it pays an advance dividend tax on the shortfall.
5. Municipal taxes. Municipalities charge their own taxes on commercial activities, signs and vehicles.

Want the full picture of company taxation? See corporate income taxes in Panama and legal forms of business in Panama.

Which other taxes show up in daily life?

• Selective consumption tax (ISC). An excise duty built into the price of alcohol, tobacco, sugary drinks, cars, jewellery and some luxury items. You won't file anything; you just pay more at the till.
• Fuel tax. A fixed amount per gallon included in the pump price.
• Stamp duty (impuesto de timbre). USD 0.10 per USD 100 on certain contracts and documents, usually paid by the business issuing them.
• Import duties. Most personal imports pay customs duty plus 7% ITBMS. Pensionado visa holders get a one-off household goods exemption.
• Vehicle plate fee. An annual municipal fee for each car you own, paid when you renew your plate.

Does Panama tax wealth, inheritance or gifts?

No. Panama has no net wealth tax, no inheritance or estate tax and no gift tax in 2026. Assets passing to your heirs are not taxed in Panama, although transfer and registration fees apply when real estate changes owner.

Honestly? For most location-independent professionals, the property tax and the annual company fees are the only specific taxes that need a calendar reminder. Everything else is either built into prices or handled by the business you buy from.

Common mistakes (and what they cost)

• Crossing USD 36,000 without registering for ITBMS → you owe the 7% you never charged, plus fines and interest, out of your own pocket.
• Not registering your main home → you pay the full 0.6% scale instead of the main-home scale, often hundreds of dollars a year.
• Forgetting the tasa única on a dormant company → surcharges pile up, and the company can be suspended, blocking bank accounts and transfers.
• Ignoring the 2% transfer tax when pricing a sale → it is due on the cadastral value even if you sell below it, so your net proceeds shrink.
• Assuming an "offshore" company pays nothing → it still owes the annual fee and must keep accounting records with its resident agent.

Frequently asked questions

What is the VAT rate in Panama in 2026

Panama's VAT, called ITBMS, is 7% on most goods and services in 2026. Alcoholic drinks and hotel lodging are taxed at 10%, and tobacco products at 15%. Basic food, medicines, medical services and education are exempt. Businesses and professionals must register once their taxable turnover exceeds USD 36,000 a year, then file monthly returns with the DGI.

How much is property tax in Panama

Panama's annual property tax is progressive. The first USD 30,000 of value is exempt, then 0.6% applies up to USD 250,000, 0.8% up to USD 500,000 and 1% above. A main home registered with the DGI is exempt up to USD 120,000, then taxed at 0.5% up to USD 700,000 and 0.7% above. Check the current bands before filing.

Does Panama have an inheritance tax

No. Panama has no inheritance, estate or gift tax in 2026, and no net wealth tax either. Your heirs pay no Panamanian tax on what they receive. Registration and notary fees still apply when real estate passes to a new owner, and your home country may tax the inheritance if you or your heirs are resident there.

Do offshore companies in Panama pay any taxes

A Panamanian company earning only foreign-source income pays no income tax and does not need a business licence. It still pays the USD 300 tasa única every year, must keep accounting records available to its resident agent and must report its beneficial owners. Missing these duties leads to fines and possible suspension of the company.

Do freelancers in Panama have to charge ITBMS

Yes, once your gross taxable turnover passes USD 36,000 a year. You then add 7% to invoices for clients in Panama and file a monthly return. Services used abroad by foreign clients are generally outside ITBMS, but you need contracts and invoices proving it. Below the threshold, registration is optional and rarely worth the paperwork.

Is there a stamp duty in Panama

Yes, but it is small. Panama's stamp tax is USD 0.10 per USD 100 on certain documents and contracts, which is 0.1%. It is usually paid by the business issuing the document. Property purchases are covered instead by the 2% transfer tax paid by the seller, plus registration and notary fees for the buyer.

Related guides

• The full Panama tax landscape overview
• Capital gains tax in Panama: property and shares
• Corporate income taxes in Panama
• Personal tax deductions and benefits in Panama
• Legal forms of business in Panama
• Specific taxes in Paraguay, compared
• Specific taxes in Mexico
• All country tax guides

Sources

• Dirección General de Ingresos (DGI) – Panama tax authority
• Ministerio de Economía y Finanzas de Panamá
• Gaceta Oficial de Panamá – official gazette (Fiscal Code and tax laws)
• Panamá Emprende – business licence (aviso de operación) portal
• PwC Worldwide Tax Summaries – Panama (secondary cross-check)

This guide is general information, not personalised tax advice. See how we research and review.