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Panama - TAXES ACCOUNTING |
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Corporate tax
Tax rate for resident companies |
A single rate of 30%.
If a corporation does not declare any dividends during the year, it must pay a deemed dividend tax, amouting to 4% of its taxable income less tax. Branches of foreign corporations must pay 10% of their taxable income less income tax as deemed dividend tax.
For companies operating in the Colon Free Zone, the regular income tax rate of 30% applies only to income derived from sale sto companies located in Panama.
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Taxe rate on long-term capital gains |
30%
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System governing groups of companies and dividends paid by subsidiaries to their parent companies |
The rate is 10% for the tax on dividends.
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Tax rate on branches |
Branches of foreign companies have the same fiscal obligations as the companies from Panama. Branches are considered as stable institutions with fiscal purposes and are not subjected to an additional tax in addition with those that companies from Panama have to pay.
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Income tax
Fiscal year |
The fiscal year begins on January 1st and ends on December 31st of the same year.
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Income tax rate |
| From 0 to 3000 PAB | 0% | | From 3000 to 3250 PAB | 52% | | From 3250 to 4000 PAB | 4% | | From 4000 to 6000 PAB | 6,5% | | From 6000 to 10000 PAB | 11% | | From 10000 to 15000 PAB | 16,5% | | From 15000 to 20000 PAB | 19% | | From 20000 to 30000 PAB | 22% | | From 30000 to 40000 PAB | 27% | | From 40000 to 50000 PAB | 30% | | From 50000 to 200000 PAB | 33% | | Beyond 200000 PAB | 30% |
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Tax deductions or
other allowances |
Annual fixed deductions: 800 PAB for singles, 1600 PAB for married couples, 250 PAB additional for every dependant child.
Are deductible:
The interests of loans for the purchase of the main home (15 000 PAB maximum).
Loans made to pay school fees.
Medical depenses
Health insurance, donations to charitable organizations etc....
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VAT rates
Standard rates |
The rate of common law is 5%.
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Reduced rates |
The reduced rates of VAT vary between 0% and 5%.
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Other important taxes
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Name of tax |
Rate |
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Donation
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0% to 33,75% (donations between couple and descendant and ancestral are free of tax, whatever is their amount).
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Annual licence tax
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all businesses have to pay a licence tax of 1% of a company's net worth, up to 20,000 US$.
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Education tax
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2,75% (1,25% which is taken from gross salaries paid.
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Accounting
Introduction
The Panamean accounting principles and audit rules refer closely to those accepted in the United States.
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Obligations and publications
According to the law, all the companies have to update regularly a stock account, a balance sheet.
Certification and auditing
The financials statements of public companies must be controlled by independent accountants.
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Export Entreprises SA ©, All rights reserved
Last modified in
January 2003
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