The Global Expat Hub
PanamaPanama's tax headline in the guide is its territorial system: only Panama-sourced income is taxed, foreign income is untaxed, property tax runs 0–1% of registered value with new-build exemptions of 5–20 years, and there is no local income-tax layer on top. It is the clearest tax story in this batch — and still advice-led, with a $1,150 retiree tax and estate line and no bands for Panama-sourced income published anywhere in the sources.
Territorial tax: foreign income untaxed, Panama-sourced income only
The guide's income-tax line is unambiguous: “None; territorial system taxes only Panama-sourced income.” Its schemes list repeats the point as an expat attraction: “Territorial tax: foreign income untaxed.” Those two identical-in-substance lines are the whole sourced claim — they cover foreign / non-Panama-sourced income; the guide publishes no bands or rates for Panama-sourced income, no filing rules and no treaty detail, so none is stated here.
For retirees the same territorial statement is the pension treatment the guide offers (see the Retirement page): a foreign pension sits on the foreign-income side of the line as the guide presents it, backed by a $1,150 budget for advice on double-taxation, pension treatment and wills rather than by a quoted pension rate.
Property and local income taxes the guide does state
Property tax: 0–1% of registered value; new builds often exempt 5–20 yrs — the guide's “Taxes (property)” line, matched exactly in the site data, in the guide's own wording and base.
Local / regional income tax: None; territorial system taxes only Panama-sourced income — the guide's “Taxes (income, local)” line, matched exactly in the site data.
At the guide's exchange rate of $1 ≈ $1 (US dollar (balboa pegged 1:1)), local-currency tax values convert at roughly that rate for planning.
The other schemes and incentives the guide names
The territorial line is one of the guide's four expat schemes, stated there as “Territorial tax: foreign income untaxed” — consistent with the income-tax line above, and presented here exactly as the guide presents it, as a statement about foreign / non-Panama-sourced income, not as “no tax in Panama.”
The remaining schemes are the Pensionado discounts (15–50%), the Friendly Nations visa and property-tax exemptions on new builds. The guide gives no tax bands for Panama-sourced income, no filing rules and no treaty detail, so none is stated here.
U.S. expats: the obligations the guide actually covers
Be clear about what this guide does not do: it contains no U.S. filing rules — no mention of U.S. returns, foreign-account reporting, exclusions or credits — and the site data adds none. What the guide does, consistently, is budget and prompt for advice at the points where U.S. obligations bite:
- Before you become resident — the Luxury timeline takes “tax structuring advice before you become resident,” and the Mid-range checklist includes “tax advice taken on residency timing.”
- For retirees — a $1,150 line for tax and estate advice covering double-taxation, pension treatment and wills, plus checklist advice on your tax residency date and the pension treaty.
- Official U.S. channel — the guide lists the U.S. Embassy in Panama among its official sources, and the Retirement checklist includes registering with the embassy or consulate.
That is the sourced position: take advice before residency, especially on double-taxation and pension treatment. Anything more specific about U.S. obligations would be unsourced here.
Legal and residency basics, with the official sources
The guide's official-law entry point is Gaceta Oficial de Panamá, listed with its URL in the guide and the site data; the site data also links a Wikipedia law overview from the country page. Everyday legal basics the guide does state: Panama drives on the right, and after a move the settle stage includes registering your address and opening a bank account. For retirees, the checklist adds preparing a local will and power of attorney. The guide's own closing disclaimer applies to this whole page: figures were current at publication in 2026, tax rules and visa schemes change, and the guide is not legal, immigration or financial advice — verify against the official sources before you rely on them.
Frequently asked questions
Does Panama tax foreign income?
No, on the guide's presentation: its system is territorial, taxing only Panama-sourced income, and its schemes list states 'Territorial tax: foreign income untaxed.' It publishes no bands for Panama-sourced income.
How much is property tax in Panama?
0–1% of registered value, per the guide and the site data, with new builds often exempt for 5–20 years — the guide's property-tax line and a separate schemes entry on property-tax exemptions for new builds.
Is there a local income tax on top?
The guide's local income line is 'None; territorial system taxes only Panama-sourced income.' No additional local layer is listed.
What home-country tax obligations does the guide cover?
None in detail — it contains no U.S. filing rules. It budgets $1,150 for retiree tax and estate advice covering double-taxation, pension treatment and wills, and advises taking tax advice on residency timing and structuring before you become resident.
Where can I read the actual Panamanian law?
The guide's official source is the Gaceta Oficial de Panamá (gacetaoficial.gob.pa). Its U.S. official source is the U.S. Embassy in Panama (pa.usembassy.gov).
Official & reference sources
One labelled partner per page. Paid placements never influence the Panama liveability score, safety rating or warnings.