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Country Hub · Panama · 2026

Panama

Territorial system — 0% tax on foreign-source income · 0–25% on Panama-source income · Pensionado visa for retirees · USD dollarized · CSS social 9.75% employee

0% — Panama territorial system exempts all foreign-source income
Foreign Income Tax
0% (first $11,000); 15% ($11,001–$50,000); 25% above $50,000
Panama-Source Income Tax
9.75% (Caja de Seguro Social — pension, health, maternity)
CSS Employee Social
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Panama Tax Facts

— 2026
Foreign Income Tax
0% — Panama territorial system exempts all foreign-source income territorial
Panama-Source Income Tax
0% (first $11,000); 15% ($11,001–$50,000); 25% above $50,000
CSS Employee Social
9.75% (Caja de Seguro Social — pension, health, maternity)
Capital Gains Tax
10% on real property gains; 5% advance (deductible); foreign asset gains exempt
Pensionado Visa
Lifetime discounts: 25% restaurant, 30% transport, 50% entertainment + medical popular
Tax Year
1 Jan – 31 Dec

Quick Country Comparison

— at $80,000
Country Take-home Eff. Rate vs Panama
Panama (foreign income)
$72,200 ~9.75% —
Costa Rica
$72,000 ~10% −$200
Colombia
$57,600 ~28% −$14,600
USA (federal+FICA)
$63,350 ~20.8% −$8,850

Panama: territorial — if all $80K is foreign-source income, 0% Panamanian income tax; if Panama-source: $3,900 + CSS 9.75%. Costa Rica: territorial, similar structure. Colombia: progressive 0–39% on worldwide income. US: federal 22–24% + FICA. Illustrative — not tax advice.

Want your exact figures? Use the full Panama calculator →
Comparison Guides

Comparison Guides

See how Panama's territorial tax system compares to Costa Rica and other expat destinations.

Panama vs Costa Rica Central America's two top expat destinations
Panama vs Portugal Retiree tax comparison: New World vs Old World
USA vs Panama US citizen relocation to Panama
USA vs Panama (Retirement) Pensionado visa vs US retirement tax
All Panama comparisons → →
Salary Guides

Salary Guides

Panama is fully dollarized (USD) — no currency exchange risk for American expats. Remote workers with foreign-source income pay only CSS social contributions (9.75%), making Panama one of the most tax-efficient jurisdictions for location-independent workers in the Western Hemisphere.

All salary guides → →
Moving from Panama

Moving from Panama

Panama's Pensionado visa requires proof of a lifetime pension income of $1,000+/month. Benefits include 25% off restaurant meals, 30% off buses/boats/domestic flights, 50% off entertainment, and 20% off dental/optical/technical services. Other visa categories: Friendly Nations visa (citiznes of 50+ countries can apply for residency by establishing economic ties), Remote Worker visa (Shortcut to residency for remote workers with $36,000+/year income), and Self-Economic Solvency visa ($200,000+ invested in Panama). Panama City offers a modern infrastructure, direct flights to major US hubs, and a cost of living approximately 20–30% below comparable US cities.

Destination deep-dives → →

Last Updated: June 2026 · Daniel · CountryTaxCalc