Paying Taxes in


Below is a detailed summary of the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as administrative burden in paying taxes and complying with postfiling procedures.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 190 economies. The most recent round of data collection was completed on June 1, 2016 covering for the Paying Taxes indicator calendar year 2015 (January 1, 2015 – December 31, 2015).

Compare Panama to 189 other economies.

Tax or mandatory contribution Payments (number) Notes on Payments Time (hours) Statutory tax rate Tax base Total tax rate (% of profit) Notes on TTR
Employer paid - Social security contributions 12 jointly 144 12.25% gross salaries 13.82
Corporate income tax 4 83 25% taxable profit 11.89
Employer paid - Professional risk insurance 0 jointly 2.1% gross salaries 2.37
Employer paid - Workers' severance payments 4 1.92% gross salaries 2.17
Employer paid - Education contribution 0 jointly 1.5% gross salaries 1.69
Commercial license tax 0 jointly 2% net worth 1.59
Real estate tax 3 0% to 2.1% real estate value 1.24
Transfer tax 1 various rates sales price 1.21
Municipal Business Tax 12 375 per month fixed fee 0.67
Capital gains tax 1 various rates capital gains 0.51
Advertising tax 0 jointly USD15 per ad per month 0.03
Vehicle tax 1 fixed fee 0.02
Fuel tax 1 0.25 per gallon 0.00
Employee paid - Social security contributions 0 jointly 9.75% gross salaries 0.00 withheld
Employee paid - Education contribution 0 jointly 1.25% gross salaries 0.00 withheld
Stamp tax on check transactions 1 10 cents per check number of checks 0.00
Value added tax (VAT) 12 190 7% value added 0.00 not included
Totals: 52 417 37.2
  • Taxes by type Answer
    Profit tax (% of profit) 12.4
    Labor tax and contributions (% of profit) 20.0
    Other taxes (% of profit) 4.8
    Answer Score
    Postfiling index (0-100) 46.6
    VAT refunds 0.0
    Does VAT/GST exist? Yes
    Frequency of VAT/GST refund submission monthly
    Does a VAT/GST refund process exist per the case study? No
    Restrictions on VAT refund process Restricted to international traders and others
    Likelihood of VAT audit N/A
    Time to comply with VAT refund (hours) N/A 0.0
    Time to obtain a VAT refund (weeks) N/A 0.0
    Corporate income tax audits 86.2
    Does corporate income tax exist? Yes
    Likelihood of corporate income tax audit Unlikely
    Time to comply with a corporate income tax audit (hours) 9.0 86.2
    Time to complete a corporate income tax audit (weeks) 0.0 100.0
    Administrative appeal process
    First level administrative appeal authority Tax Administration
    Is the appeal authority independent? Same auditor
    Are appeal guidelines accessible to the public? Yes
    Source of appeal guidelines online/in person at tax office
    Is there a legal time limit for the appeal authority to issue a decision on the tax appeal? No
    Legal time limit


Name of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table.

The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit.

N/A = Not applicable.