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Income Tax

Panama Corporate Income Tax (ISR)

Panamaian corporate taxes were recently lowers from 27.5 % to 25 %. The corporate taxes can be subdivided into the following catagories:

- ISR (Impuesto sobre la renta) or tax on annual profit. The declared amount is subject to a 25 % tax.
- A complimentary tax which is a pre-payment of dividend tax withholding. This tax is 4 % of the annual profit but is used as a credit against any future dividend withholdings.
- Operations notice tax (Aviso de operacciones) is 2 % of the current years profit, retained earnings and paid-in capital.
- A tax to the municipio of a few hundred dollars is also payable each year.
- An annual franchise tax of $300 ($250 first year) is also needed.

The taxes are collected by pre-payments on a monthly basis. Each local corporation needs to deposit 1 % of the gross income for the month. This is called AMIR locally.

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