Accounting & Tax in Panama
Stay current on the DGI's territorial income tax, ITBMS, and accounting-records requirements year-round, so your Panamanian S.A. never loses good standing.
Annual Return Deadline
3 months after fiscal year-end
Tax ID
RUC
Primary Registry
DGI
Accounting & Tax in Panama: What You Need to Know
A Panamanian S.A. pays 25% corporate income tax under the territorial system, taxing only Panama-source income, with a CAIR alternative minimum, the greater of standard tax or 4.67% of gross taxable income, applying above $1.5 million in taxable income. Starting fiscal year 2027, Law 526 of 2026 introduces an economic-substance exception: multinational-group entities earning foreign-source passive income (dividends, interest, royalties, capital gains) face a 15% tax on that income unless they can demonstrate real substance in Panama. ITBMS runs at 7%, filed monthly via Formulario 430, with electronic invoicing required through a DGI-authorized PAC above a small threshold. Every Panama entity, even one earning only foreign-source income, must keep accounting records and supporting documentation, retained at least 5 years, with a copy sent to the resident agent annually by April 30. Related-party transactions with entities in other tax jurisdictions require transfer pricing documentation (Form 930) within 6 months of fiscal year-end, and the annual income tax return is due 3 months after fiscal year-end, alongside the separate $300 tasa única franchise tax.
Key Requirements
25% corporate income tax under Panama's territorial system, taxing only Panama-source income, with a CAIR alternative minimum (the greater of standard tax or 4.67% of gross taxable income) for companies with taxable income above $1.5 million
From fiscal year 2027, Law 526 of 2026 taxes foreign-source passive income (dividends, interest, royalties, capital gains) at 15% for multinational-group entities that cannot demonstrate real economic substance in Panama
7% ITBMS, filed monthly via Formulario 430, due the 15th of the following month, with electronic invoicing required through a DGI-authorized PAC above a small annual-income and document-volume threshold
Accounting records and supporting documentation required for every Panama entity, including those with only foreign-source income, retained a minimum of 5 years, with a copy sent to the resident agent annually by April 30
Transfer pricing documentation (Form 930, now Version 3) for transactions with related parties in other tax jurisdictions, due within 6 months of fiscal year-end with no automatic extension
Annual income tax return due 3 months after fiscal year-end (March 31 for calendar-year filers), plus the separate $300 annual tasa única franchise tax due July 15 or January 15 depending on incorporation date
Common Challenges
Claiming territorial 0% treatment now carries real audit exposure
From fiscal year 2027, Law 526 taxes foreign-source passive income at 15% for multinational-group entities unless they document real substance in Panama: qualified staff, facilities, and local strategic decision-making. Simply claiming income is foreign-sourced is no longer enough on its own.
No local activity does not exempt a company from bookkeeping
Every Panama entity must keep accounting records and supporting documentation, wherever located, even one earning 100% foreign-source income. The resident agent must be able to produce these records on demand, and failing to provide them risks penalties from $5,000 to $100,000.
The tasa única and Form 930 have no grace period or automatic extension
Missing the annual tasa única deadline escalates quickly from a $50 penalty toward $300 a year, with three consecutive unpaid years risking suspension of corporate rights. Form 930's 6-month transfer pricing deadline is similarly firm, with no automatic extension available.
How NavviPal Helps
Annual income tax return and ITBMS filings handled on their DGI deadlines, including the tasa única franchise tax
Accounting records and supporting documentation maintained and made available to the resident agent on schedule
Transfer pricing Form 930 preparation for related-party transactions in other tax jurisdictions
Guidance on Law 526's economic substance requirements for any foreign-source passive income, so the 15% exposure doesn't arrive as a surprise
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