|Income Tax - Natural Person|
This tax is the taxable income that is produced, from any source, within the territory of the Republic of Panama, regardless of where it is perceived.
The taxpayer, as the term is used in this Title is the natural or legal person, national or foreign, who receives the taxable income subject to the tax.
It shall be deemed to have been produced within the territory of the Republic of Panama:
B. The remuneration of paid personal work with salaries, salaries, representation expenses or other remunerations in money or in kind that is paid to workers or persons by reason of the exercise of their profession or trade.
Gross income is the total, without deducting any amount, of the income of the taxpayer in money, in kind or in securities, being therefore included in the total amount received by:
Salaries, salaries, bonuses, salaries, salaries, allowances, gratuities, gratuities, commissions, pensions, pensions, fees, representation expenses, bonuses, profit sharing, use of dwellings or vehicles, Other similar remuneration for personal services, whatever their name, even if they are not subject to social security contributions, excluding health insurance expenses.
Natural persons will pay the income tax in accordance with the following rates:
|If the net taxable income is:||
The tax will bre:
Up to B/. 11,000.00
More than B/ 11,0000.00 up to B/ 15,000.00
15% times the excess of B/. 11,000.00 up to B/. 50,000.00
More than B/. 50,000.00
They’ll pay B/. 5,850.00 for the first B/. 50,000.00 and a rate of 25% over the excess of B/. 50,000.00
After computing the taxable income on which the Income Tax is to be paid, natural persons will be entitled to the following annual deductions:
The spouses, the sum of eight hundred balboas (B / .800.00), when submitting their declaration together.
For the purposes of this article, a spouse's partner is defined as one who is bound by marriage bond or one who has a married life in conditions of stability and uniqueness for at least five (5) consecutive years duly verified by the interested parties.
This marital life will be verified with the declarations of two (2) witnesses, under the gravity of oath.
The sums paid as interest for mortgage loans that have been or are destined exclusively for the acquisition, construction, construction or improvements of the main dwelling for the taxpayer's own use, provided that it is located in the Republic of Panama. This deduction may be made up to a maximum annual amount of Fifteen Thousand Balboas (B / .15, 000.00). If the property belongs to a number of taxpayers, the amount of interest may be apportioned between them up to the maximum fixed here.
Interest paid on loans intended exclusively for education within the national territory of the taxpayer or the persons he or she supports or educates, and those caused by loans granted by the Institute for Training and Exploitation of Human Resources (IFARHU).
Medical expenses incurred within the national territory by the taxpayer, provided they are duly proven. For the purposes of this Article, medical expenses are considered:
A. The primes for hospitalization and medical care insurance policies that cover the expenses mentioned in paragraph b) of this numeral;
B. Sums paid by the taxpayer for hospitalization, diagnosis, cure, prevention, relief or treatment of diseases, provided that such sums are not covered by insurance policies.
The amounts received for representation expenses will be subject to the withholding of Income Tax as detailed below:
- Up to B / .25, 000.00, 10%.
- Of more than B / .25, 000.00, they will pay B / .2, 500.00 for the first B / .25, 000.00 and a rate of 15% on the surplus.
The taxpayer who receives, in addition to the salary or salary, income from representation expenses, may file a sworn declaration of income for the purpose of practicing the tax deductions established in this Code, as well as the contributions to the pension funds established by Law 10 of 1993.
However, income from representation expenses is not cumulative to salary and other taxable income that does not correspond to representation expenses.