Panama — Value-added tax (VAT)
|General VAT Rate||Other Rates||Local Currency|
|7%||15%, 10%||Balboa (PAB)|
Panama's general VAT rate is 7%, with other rates including 15% and 10% that can apply to certain transactions. The Value-added tax (VAT) is administered by the Ministry of Finance (http://www.mef.gob.pa/es/Paginas/home.aspx) in Panama City.
Panama has special raised VAT rates on the following:
10% higher VAT rate on: alcohol and hotels
15% higher VAT rate on: cigarettes.
Panama is a member of the None that would provide differentiated VAT treatment trading bloc, which may affect international VAT collection and regulations.
Panama's consumption tax is called the Value-added tax (VAT), locally known as Impuesto a la transferencia de bienes corporales muebles y la prestación de servicios (ITBMS), which was introduced in December 1976.
Panama VAT rates for 2017
- 10%, 15%, exempt
Panama VAT number format
Businesses in Panama that are required to collect tax will be issued an identification number. Tax identification numbers can be verified with the Ministry of Finance, and will follow a certain format. The VAT number format is National Tax Registry Number (RUC).
Panama Value-added tax (VAT) Thresholds
These are the revenue thresholds at which businesses in Panama are required to start collecting and remitting tax.
- Gross annual income of USD36,000 or month average above USD3,000
Recovery of VAT by non-established businesses
Non-established businesses are small, unincorporated businesses that sell taxable goods and may consist of a single individual, or several. Non-incorporated businesses in Panama are not required to collect taxes from the consumer.
Panama VAT Refunds
Many countries allow tourists, and others making purchases for export, to receive a VAT refund on exiting the country (or make purchases VAT free). While we don't have data on the Panama VAT refund program, more info can be obtained from the Ministry of Finance.
Panama Tax Sources & Citations
- EN: Panama Value Added Tax
- RU: НДС
- CN: 增值税
- Panama Ministry of Finance (http://www.mef.gob.pa/es/Paginas/home.aspx)
- Ernst & Young global VAT tax study, Panama (updated 2017)
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