Taxes
Panama — Tax: Tax Residency
How individual tax residency works in Panama, a territorial system, per PwC Worldwide Tax Summaries (page last reviewed 4 August 2026).
VerifiedProfessional tax guide — not a government sourcePwC Worldwide Tax Summaries - Panama, Individual: Residence and Taxes on personal incomeLast reviewed: 2026-10-26
Why this matters
Understanding tax residency is crucial for relocating to Panama, as it affects tax obligations, social security contributions, and other benefits.
Key facts
- PwC describes a resident as a person physically located and generating income in Panama, with a threshold of more than 183 days in the year.
- Panama taxes on a territorial basis: citizens and residents are taxed on Panamanian-source income, and foreign-source income is not taxed.
- Non-residents are taxed only on Panamanian-source income, and payers must withhold the tax on income paid to them.
- Resident rates on taxable income in USD: 0% up to 11,000; 15% of the excess from 11,000 to 50,000; USD 5,850 plus 25% of the excess over 50,000.
- Interest on Panamanian government securities, savings accounts and time deposits with Panama-based banks is exempt.
Steps
- Determine Eligibility — Consult the official Panama government website or a tax professional to determine if you meet the tax residency requirements based on your specific situation.
- Register with the Treasury — If you are considered a tax resident, you will need to register with the Panamanian Treasury (DGME) and obtain a tax identification number (RUC).