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standard rate: 25% on Panamanian source net taxable income · alternate calculation cair: For taxpayers with annual taxable income > US$1.5M, tax base is the greater of (a) ordinary net taxable income × 25% or (b) 4.67% of gross taxable income (CAIR) · territorial principle: Pure territorial taxation: only Panamanian source income taxable. Foreign source income (activities perfected, services rendered, or merchandise traded outside Panama) exempt regardless of recipient's residency. Re invoicing operations between non Panamanian parties are foreign source. · special regimes: Colón Free Zone (CFZ - 5% income tax on external operations + dividend reductions), Panama-Pacífico SEZ (full exemption certain activities), SEM HQ regime (5% reduced CIT + dividend WHT exemptions), EMMA (Multinational Manufacturing - 5% CIT), City of Knowledge (broad exemptions), FTZs under Law 32/2011 · cfc rules: None (territorial regime makes CFC unnecessary) (DGI; Tax Code Articles 694–733; Law 18,083; PwC Panama WWTS 2025 | taxsummaries.pwc.com/panama)

name: ITBMS - Impuesto de Transferencia de Bienes Muebles y Servicios · standard rate: 7% · reduced rates: 10% on alcoholic beverages and hotel accommodation; 15% on tobacco · exempt: Basic food, medicines, residential rentals, healthcare and education, exports (DGI; PwC Panama WWTS 2025)

dividends: 10% from Panamanian source profits; 5% from foreign source or export profits; 20% on bearer share dividends; 40% if paid to recipient in discriminating jurisdiction. Additional 'complementary tax' 10% on undistributed earnings deemed distributed (4% foreign source/export). · interest: 12.5% effective rate (25% on 50% of gross remittance) to non residents · royalties: 12.5% effective rate (25% on 50% of gross remittance) on royalties, technical assistance and services to non residents (Tax Code Articles 731–733; PwC Panama WWTS 2025)

Limited general R&D credit. Targeted incentives under Law 76 (City of Knowledge), Law 41 (SEM), Law 159/2020 (EMMA).

duration: 5 years, deductible at up to 20% per year and capped at 50% of taxable income each year. No carry back. (Tax Code Article 698-A; PwC Panama WWTS 2025)

10% flat on real estate and securities. Real estate sale: buyer withholds 3% of higher of price or cadastral value as advance (creditable/refundable). Share sale: buyer withholds 5% as advance, creditable against 10% final. Habitual real estate dealers taxed at progressive 3.75–6.75% of sale price.