Individual - Other taxes

Last reviewed - 23 January 2024

Social security taxes

From January 2013, social security tax is assessed at a rate of 9.75% on wages and other compensation paid, including compensation in kind, for employees and 12.25% for employers. There is no maximum limit on the taxable amount.

Educational insurance tax

Educational insurance tax is assessed at the rate of 1.25% for employees and 1.50% for employers, on salaries and wages paid. There is no maximum limit on the taxable amount.

Capital gains tax

The transfer of real estate property and securities is subject to WHT on the gross transactions amount, but the taxpayer shall make a special income tax assessment to pay the capital gain and may request a rebate of the difference between the WHT and the capital gain.

In the case of the transfer of real estate property, a 2% real estate transfer tax plus a 3% income tax advance payment must be submitted (done over the gross transaction amount or the cadastral value, whichever is greater). The 3% may be deemed definitive; contrariwise, the tax will be assessed at 10% of the gain and the 3% of the advanced payment will be credited. Any exceeding amount may be subject to rebate.

The rates as described in the table below will be applicable to the transfer of real estate if:

  • the transferor´s core business is the sale of real estate with new constructions
  • it is the first sale of the property after the new construction is finished
  • the construction permit was issued after January 1 of 2011, and
  • the land appraisal was made within the last two years prior to the transfer of the property.
New housing construction Rate (%)
Up to USD 35,000 0.50
From USD 35,000 up to USD 80,000 1.50
Greater than USD 80,000 2.50
New commercial construction 4.50

When transferring new properties with new constructions, the real estate transfer tax (2%) will not apply.

If only the first criterion is met but none of the other three, then the income tax will have to be assessed under the ordinary regime.

The transfer of securities is subject to a 5% WHT, and the tax rate on capital gain is 10%. The law establishes the application of a 5% WHT that will be applied by the buyer. The seller may accept the WHT as definitive or perform the calculation of the gain, apply the rate of 10%, and deduce the applied WHT. In case the WHT is higher, the taxpayer can choose to claim the return of exceeding payments.


Sales price (a) 1,000
Cost (b) 900
Benefit (c) 100
WHT at 5% of (a) 50
Tax at 10% of (c) 10
Payment in excess 40

The sale of fixed assets is subject to 10% tax rate on the capital gain, and there is no WHT.

Consumption taxes

Movable goods and services transfer tax (ITBMS)

The movable goods and services transfer tax (Impuesto de Transferencia de Bienes Muebles y Prestación de Serviciosor ITBMS) is the Panamanian value-added tax (VAT).

The general tax rate is currently 7%.

See the Other taxes section in the Corporate tax summary for more information.

Excise tax (selective consumption tax)

The selective consumption tax is applied to goods (e.g. jewellery, expensive automobiles, guns, tobacco, alcoholic beverages) and services (e.g. mobile, cable TV, satellite TV) that are considered as non-essential. The tax base is the cost, insurance, and freight (CIF) price plus import duties for imported items and sales price for all other activities.

See the Other taxes section in the Corporate tax summary for more information.

Net wealth/worth taxes

There are no net wealth/worth taxes in Panama.

Inheritance, estate, and gift taxes

There are no inheritance, estate, or gift taxes in Panama.

Immovable Property Tax

In Panama, all owners of real estate should pay Immovable Property Tax annually at a rate between 0% and 2.10%, depending on the value of the property. From January 2019, the maximum rate will decrease to 0.9%.