Business taxes in Panama: which ones you pay, when and how much
Income tax, aviso de operación, tasa única, payroll and ITBMS, with their calendar. Start with the number: how much of your year the State takes, and how much you can bring it down.
Updated: 6 October 2026 · Sources: Tax Code (arts. 699, 699-A, 700, 709), DGI, Law 462/2025 (CSS)
Estimator: what your business pays per year
Five numbers. It runs in your browser; nothing is sent. An estimate so the conversation with your accountant starts with a number, not a doubt.
| Type your numbers and the breakdown appears. |
Step 2 · What can bring that number down
People care more about the reduction than the tax, and rightly so. Enter what you have; each deduction's cap is next to it.
| Enter a deduction and you will see the estimated saving. |
Assumptions: income tax by art. 700 brackets (individuals) or 25% under art. 699 (companies) · aviso de operación 2% of capital, min B/. 100, max 60,000, exempt if capital is B/. 10,000 or less · tasa única B/. 300 companies only · employer contributions CSS 13.25% + education insurance 1.5% · excludes occupational-risk insurance, municipal tax, depreciation and special regimes. ITBMS is not here: you collect it, you don't pay it. Confirm with your accountant.
- Which taxes does a business pay in Panama? The map
- Income tax: individuals and companies
- Aviso de operación: 2% of capital
- Tasa única: the company's yearly fee
- Payroll: what an employee costs beyond salary
- How to pay less tax, legally
- ITBMS: the one you collect, not the one you pay
- Municipal tax
- The calendar for the year
- Frequently asked questions
Which taxes does a business pay in Panama?
Five that almost everyone pays: income tax, aviso de operación, tasa única (if you are a company), CSS payroll contributions, and municipal tax. And one you collect for the DGI: ITBMS.
Six bosses on six different levels, each with its own date. What kills a small business is not the rate: it is reaching the deadline without knowing it existed.
Income tax: individuals and companies
Individuals: 0% up to B/. 11,000 of net income, 15% on the part between 11,000 and 50,000, and 25% on anything above 50,000. Companies: 25% on net taxable income. Filed within three months after year end.
Net income is income minus deductible expenses with a valid invoice: every purchase without an invoice in your name is income you could not subtract. Companies with gross income above B/. 1,500,000 also compute the CAIR (4.67% of gross income) and pay the higher of the two. Companies with gross income up to B/. 500,000 registered as MIPYME may compute their tax with the individuals' table (art. 699-A); the DGI publishes the exact tiers.
Source: Tax Code, arts. 699, 699-A and 700; DGI, income-tax return. Confirm with your accountant.
Aviso de operación: 2% of capital
A yearly tax of 2% on the capital invested in the company, minimum B/. 100 and maximum B/. 60,000. If capital does not exceed B/. 10,000, it is not paid. Due 31 March.
Source: Law 5 of 2007 (Aviso de Operación) and Tax Code. Confirm with your accountant.
Tasa única: the company's yearly fee
If your business is a corporation, it pays B/. 300 a year for existing, active or not. Due 15 July if the company was registered January to June, 15 January if July to December. Individuals do not pay it.
Source: DGI, Tasa única. Confirm with your accountant.
Payroll: what an employee costs beyond salary
For every B/. 100 of salary, the employer also contributes B/. 13.25 to the CSS and B/. 1.50 of education insurance, plus occupational-risk insurance by activity. The employee has 9.75% CSS and 1.25% education insurance withheld.
Law 462 of 2025 raised the employer rate to 13.25% and keeps raising it: 14.25% from March 2027 and 15.25% from March 2029. If you hire in 2026, budget with the 2029 rate. Payroll is paid monthly.
Source: Law 462 of 18 Mar 2025 (CSS). Confirm with your accountant.
How to pay less tax, legally
Tax is computed on what is left after subtracting: invoiced expenses, payroll, personal deductions, prior-year losses and depreciation. Each one is real money and almost nobody plays them all.
- Ask for an invoice with your RUC on every business purchase. The biggest deduction and the most wasted: a purchase without an invoice is income you overpay on and an ITBMS credit you give away.
- Declare the full payroll. Salaries and employer CSS contributions are deductible. Paying "off the books" costs twice: no deduction, plus the risk of a fine.
- Individuals: use all four deductions. Mortgage interest on your home (up to B/. 15,000), private retirement plan contributions (up to 10% of income, max B/. 15,000), donations to authorized entities (up to B/. 50,000) and school expenses (up to B/. 3,600 per dependent). Step 2 of the estimator computes them.
- Carry losses forward. A bad year is recovered over the next five, 20% of the loss per year, never lowering taxable income by more than 50% in a year.
- Depreciate equipment. Computers, vehicles, machinery and improvements are deducted in parts over the years, per the regulation's tables (Executive Decree 170 of 1993). Buying in December and not depreciating is leaving money on the table.
- Check whether you qualify as MIPYME. With gross income up to B/. 500,000, a registered company may be taxed on the individuals' table. Registration is a procedure, not an expense.
- File on time, always. The one-month extension avoids the late-filing fine, not the interest on what you owe. Saving the game every day avoids the final boss at year end.
If you are a company, two more taxes appear when you distribute: 10% on dividends from Panama-source profits (5% foreign-source) and the 4% complementary tax on undistributed profits when less than 40% is distributed. They are not in the estimator because they depend on what you decide to distribute.
Source: Tax Code, arts. 699-A, 709 and 733; Executive Decree 170 of 1993; DGI. Confirm with your accountant.
ITBMS: the one you collect, not the one you pay
The 7% (10% alcohol and lodging, 15% tobacco) you charge on every sale is not yours: you hand it to the DGI every month with Form 430, minus what you paid on your purchases. You are a contribuyente if you invoiced more than B/. 36,000 the previous year.
It passes through your register on its way. Treating it as profit is the number-one first-year mistake. Exempt, among others: basic-basket foods, medicines, health and educational services, passenger transport, housing rent, residential water and electricity, financial services, books and newspapers. The official list is in the DGI's ITBMS instructions.
Source: Tax Code art. 1057-V; DGI, ITBMS instructions and Form 430 (due the 15th of the following month); Executive Decree 470/2015. Confirm with your accountant.
Municipal tax
Each municipality charges a monthly fee by activity and business size; the amount is set by its municipal agreement. Not in the estimator.
Source: each district's municipal agreements. Ask your municipality or your accountant.
The calendar for the year
ITBMS with Form 430, by the 15th. CSS payroll, monthly.
Income-tax return. Extension: 15 April.
Income-tax return and aviso de operación. Return extension: 30 April.
Company tasa única, by registration semester.
Electronic invoice on every sale; invoice with your RUC on every purchase. Without that, none of the other numbers add up.
In Tadpole every sale and every purchase carries its tax — ITBMS per product, electronic invoice with CUFE, invoiced expenses and payroll — and the books accumulate what you will declare. At the deadline you open a report, not a box of photos.
See accounting and invoicingFrequently asked questions
Does a sole proprietor pay less tax than a company?
Income tax by brackets (0%, 15% and 25%) instead of a flat 25%, no tasa única and no dividend tax. In exchange, personal liability. Which is better depends on income and risk: ask your accountant with the estimator's number in hand.
If I have no profit, do I pay taxes?
No income tax. But the tasa única (companies), the aviso de operación if capital exceeds B/. 10,000 and payroll contributions are paid anyway.
When is the income-tax return due?
Individuals by 15 March, companies by 31 March. An extension gives one more month (15 April / 30 April) with no filing penalty; interest on what you owe still runs.
Is ITBMS an expense of my business?
No. You collect it and hand it over. What you pay on purchases invoiced to your business is credited against what you collected.
Sources: Tax Code (arts. 699, 699-A, 700, 709, 733, 1057-V) · DGI: income-tax return, deadlines, tasa única, ITBMS · Law 5/2007 · Law 462/2025 · Executive Decree 170/1993 · Executive Decree 470/2015. Reviewed 5 October 2026. This guide informs; it does not replace your accountant.