MultiPass Rank
Markdown
Beyond travel access

Panama: individual tax scope

Individual income tax focuses on income legally sourced in Panama, not on a passport or where payment arrives. Fiscal residence has alternative presence and permanent-home criteria, and foreign-source classification and treaty relief require separate checks.

Sources reviewed 5 official sources
Conditions apply

Fiscal-residence day test

An individual is fiscally resident after more than 183 days, consecutive or intermittent, in Panama in a fiscal year or the immediately preceding year. This tax test is distinct from nationality and immigration documentation.

Tribunal Administrativo TributarioTAT-RF-013/2024, section VII, printed p.7, quoting Fiscal Code Article 762-N.
Conditions apply

Alternative permanent-home route

A permanent home can establish fiscal residence without satisfying the day test. The tax tribunal explains that the home, economic interests and family interests require substantive assessment: merely owning or renting an available property does not establish residence automatically.

Tribunal Administrativo TributarioSection VII, printed pp.7–10; Article 762-N, Decree 958/2013 Article 10 and Resolution 201-0354/2016 fifth provision.
Conditions apply

Domestic-source income

Article 694 taxes income produced within Panama irrespective of where it is received and covers national and foreign individuals. Nonresidence is not a blanket exemption: specified services benefiting a Panamanian recipient can be domestic source where they support Panamanian-source income and are deducted by the recipient.

Gaceta Oficial de PanamáProcuraduría de la Administración / Gaceta OficialLaw 1/2014 Article 3 restoring Fiscal Code Article 694, opening, linked official extract p.1; Law 27/2015 Article 1 replacing paragraph 1(e), linked official extract p.1.
Official-source summary

Foreign-source reporting is separate

DGI's individual-return instructions require entering domestic, foreign and exempt income, then separately remove qualifying foreign-source income when calculating taxable receipts. Foreign payment or a foreign client alone does not determine source; Article 694 and special rules govern the classification.

Dirección General de IngresosGaceta Oficial de PanamáIndividual-return instructions V8, printed pp.2 and 4, income opening and lines 19–21; Fiscal Code Article 694.
Conditions apply

Residence evidence and treaties

A residence-certificate request identifies the treaty or general use and the year concerned. DGI asks individuals for migration movements, identity, housing and other Panama-link evidence. A certificate application is not automatic treaty relief; the applicable convention and facts must be checked.

Dirección General de IngresosQuestions 3 and 5.

Scope and limitations

  • General information, not a personalised tax calculation. Income classification, withholding, filing and treaty conditions require individual assessment.
  • Article 694's official restoration and the 2015 amendment to paragraph 1(e) are read alongside the currently posted DGI individual-return instructions; this is not represented as a full 2026 consolidated Fiscal Code. The services example is not exhaustive: paragraph 1(e) also has rules for public bodies, non-taxpayers and taxpayers in loss.
  • The tribunal decision supports residence criteria and evidentiary limits, not a guarantee that another applicant will obtain a certificate.

Next review due . An official update can change these requirements sooner.

Official sources

  1. Law 1 of 2014 restoring Fiscal Code Article 694Gaceta Oficial de Panamá · Retrieved 2026-09-22 · ES
  2. Law 27/2015 — Article 694(1)(e) amendmentProcuraduría de la Administración / Gaceta Oficial · Retrieved 2026-09-22 · ES
  3. TAT-RF-013 of 6 March 2024 — residence criteriaTribunal Administrativo Tributario · Retrieved 2026-09-22 · ES
  4. Version 8 instructions for individual income returnsDirección General de Ingresos · Retrieved 2026-09-22 · ES
  5. Treaty and residence-certificate questionsDirección General de Ingresos · Retrieved 2026-09-22 · ES