Last reviewed - 23 January 2024

Panama, a country in Central America, is bordered by Costa Rica to the west, Colombia to the southeast, the Pacific Ocean to the south, and the Caribbean Sea to the north. Panama became independent in 1903 and is a constitutional democracy. The country is divided into ten administrative provinces, with Panama City as the capital. The official language of Panama is Spanish (although English is also widely spoken). The official currency in Panama is the balboa (PAB). Since the balboa exists in the form of coins only, Panama uses United States dollars (USD) for all its paper currency. The US dollar and the balboa have the same value in Panama and can be used interchangeably, with no exchange restrictions.

Panama's economy is mainly based on a well-developed service sector heavily weighted towards banking, commerce, tourism, trading, and private industries because of its key geographic location.

In addition, revenue from the Panama Canal tolls represents a significant portion of Panama's gross domestic product (GDP). The Canal was built by the US Army Corps of Engineers between 1904 and 1914. The entire Panama Canal, the area supporting the Canal, and remaining US military bases were transferred to Panama by the end of 1999. In October 2006, Panamanians approved a plan to expand the Canal. The expansion project, which was completed in 2016, doubles the Canal's capacity, enabling it to accommodate ships that are now too large to transverse the transoceanic crossway.

The expansion of the Panama Canal, combined with other huge infrastructure, is expected to boost and extend economic expansion in Panama for some time.

Regarding GDP, according to the National Institute of Statistics and Census of Panama (INEC), the Panamanian economy reached a GDP (in nominal terms) of PAB 76,522.5 million during the year 2022, with a growth rate of 13.5% compared to the previous year, which corresponds to an increase of PAB 9,115.8 million.

The INEC also mentions that the internal activities that presented a positive performance in this period were: construction, commercial activities, manufacturing industries, electricity, real estate and business, artistic, entertainment and recreational activities, and other personal services; while education registered a decrease. Among the added values generated by activities related to the rest of the world, the following presented increases: The Panama Canal, port services, air transport, and the Colon Free Zone. Furthermore, the income generated by the activities of mines and quarries related to the export of copper and its concentrates decreased; also, some agricultural exports decreased.

PwC InterAmericas is a regional entity comprised of seven firms: PwC Guatemala, PwC El Salvador, PwC Honduras, PwC Nicaragua, PwC Costa Rica, PwC Panama, and PwC Dominican Republic; together, we have over 1,000 professionals ready to provide our clients with audit, tax, legal, and consulting services. PwC InterAmericas firms are backed by over 40 years experience rendering a high standard of professional services to the private sector, public sector, and non-profits. PwC Panama supports clients with the local knowledge and skills of more than 200 professionals and with access to a broad range of other professionals across the PwC global network of firms.

Quick rates and dates

Corporate income tax (CIT) rates
Headline CIT rate (%)


Corporate income tax (CIT) due dates
CIT return due date

Three months after the end of the fiscal year.

CIT final payment due date

Tax must be paid no later than three months after closing of the corresponding accounting period.

CIT estimated payment due dates

Six, nine, and 12 months after the end of the taxable year.

Personal income tax (PIT) rates
Headline PIT rate (%)


Personal income tax (PIT) due dates
PIT return due date

15 March

PIT final payment due date

31 March

PIT estimated payment due dates

Three equal instalments on 30 June, 30 September, and 31 December.

Value-added tax (VAT) rates
Standard VAT rate (%)

Movable goods and services transfer tax: 7

Withholding tax (WHT) rates
WHT rates (%) (Dividends/Interest/Royalties)

Resident: 5, 10, or 20 / NA / NA;

Non-resident: 5, 10, or 20 / 12.5 / 12.5

Capital gains tax (CGT) rates
Headline corporate capital gains tax rate (%)

See Panama's corporate tax summary for capital gain rates.

Headline individual capital gains tax rate (%)

See Panama's individual tax summary for capital gain rates.

Net wealth/worth tax rates
Headline net wealth/worth tax rate (%)


Inheritance and gift tax rates
Headline inheritance tax rate (%)


Headline gift tax rate (%)


NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

NP stands for Not Provided (i.e. the information is not currently provided in this chart)

All information in this chart is up to date as of the 'Last reviewed' date on the corresponding territory Overview page. This chart has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this chart, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.