# 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.

Scope: Baseline individual income taxation and fiscal residence; excludes companies, multinational substance rules, special zones and investment regimes.

Jurisdiction: Panama — individual income tax. Sources reviewed 2026-09-22; review due 2026-12-21.

General information, not personal tax advice. Nationality, tax residence and source of income are different questions. Consult the tax authority or a qualified adviser for your circumstances.

## 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.

Evidence: conditional. [Tribunal Administrativo Tributario: TAT-RF-013 of 6 March 2024 — residence criteria](https://tat.gob.pa/back/media/uploads/publicaciones/resoluciones/2024/04/04/Exp-019-2023.pdf). Source location: TAT-RF-013/2024, section VII, printed p.7, quoting Fiscal Code Article 762-N..

## 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.

Evidence: conditional. [Tribunal Administrativo Tributario: TAT-RF-013 of 6 March 2024 — residence criteria](https://tat.gob.pa/back/media/uploads/publicaciones/resoluciones/2024/04/04/Exp-019-2023.pdf). Source location: Section VII, printed pp.7–10; Article 762-N, Decree 958/2013 Article 10 and Resolution 201-0354/2016 fifth provision..

## 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.

Evidence: conditional. [Gaceta Oficial de Panamá: Law 1 of 2014 restoring Fiscal Code Article 694](https://infojuridica.procuraduria-admon.gob.pa/norma_screen.php?numsec=47685); [Procuraduría de la Administración / Gaceta Oficial: Law 27/2015 — Article 694(1)(e) amendment](https://infojuridica.procuraduria-admon.gob.pa/norma_screen.php?numsec=48754). Source location: Law 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..

## 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.

Evidence: documented. [Dirección General de Ingresos: Version 8 instructions for individual income returns](https://dgi.mef.gob.pa/DInforme/pdf/RENTA%20-%20NATURAL.pdf); [Gaceta Oficial de Panamá: Law 1 of 2014 restoring Fiscal Code Article 694](https://infojuridica.procuraduria-admon.gob.pa/norma_screen.php?numsec=47685). Source location: Individual-return instructions V8, printed pp.2 and 4, income opening and lines 19–21; Fiscal Code Article 694..

## 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.

Evidence: conditional. [Dirección General de Ingresos: Treaty and residence-certificate questions](https://dgi.mef.gob.pa/Preguntas/Conve). Source location: Questions 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.

## Explore this passport

- [Passport rank and travel access](https://multipassrank.com/passport/panama)
- [Citizenship requirements](https://multipassrank.com/passport/panama/citizenship)
- [Country-profile JSON, including sources and scoped requirements](https://multipassrank.com/api/v1/country-profiles/PA)
- [Multiple-citizenship policy guide](https://multipassrank.com/dual-citizenship-countries)

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