For some, tax relief is, in and of itself, paradise.
As a US citizen and a resident of Panama you are entitled to earn as much as $70,000.00 annually without paying taxes to the American government. (A check with your accountant will be in order to verify this and determine how this law affects you.)
Also, any property in Panama with a registered value of $30,000 is not subject to property tax. Owners of property of a higher value are liable for property taxes. This tax will be under Normal Tariff (article 766 of the Tax Code) and Preferential Tariff or TPCA (article 766-A of the Tax Code). The application of either tariff will depend on the specific status of the property. In case of a Normal Tariff the tax applicable is as follows: $30,000 to $50,000, 1.75%; 50,000 to 75,000, 1.95%; more than 75,000, 2.10%. In case of Preferential Tariff the tax applicable will be as follows: for the $30,000 to $50,000 bracket, .70%; for the difference between 50,000 to 75,000, .90%; more than 75,000, 1.00%. And, of course, it is always best to get appropriate tax advise from a qualifed Panamanian professional in every case.
The property improvements will not be subject of taxation under the following circumstances:
For properties that had the construction permit before September 1, 2006, there will be a 20 year exoneration.
For properties that got the construction permit after September 1, 2006, it will be the following:
1. up to $100,000 - 15 years
2. more than $100,000 up to $250,000 � 10 years
3. more than $250,000 � 5 years
If the properties get the construction permit before July 1, 2009 and their improvements are duly registered in the Panamanian Public Registry before December 31, 2011, the exoneration will be for 20 years.
These exonerations will take place either at the registration of the improvements or at the issuance of the occupation permit, whichever occurs first.
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