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Dividend tax in Panama 2026
Panamanian companies withhold a final 10% on dividends paid from local profits — and just 5% when the underlying profits were foreign-source or export earnings.
Dividends you receive from foreign companies are foreign income: 0% under the territorial rule.
At a glance
- top rate
- 10% final (Panama-source profits); 20% on bearer shares
- entry band
- 5% on foreign-source and export profits; 0% on foreign dividends received
- tax year basis
- Withheld on distribution
- filing deadline
- None — the withholding is final
- residency basis
- Same rates for residents and non-residents
- regime flag
- Free-zone companies withhold 5% regardless of source
Rates
How dividends are taxed (2026)
| Rate | Base | Applies to |
|---|---|---|
| 10% | Gross dividend | Distributions of Panamanian-source profits by licensed companies — final |
| 5% | Gross dividend | Distributions of foreign-source or export profits, and all distributions by free-zone companies |
| 20% | Gross dividend | Bearer shares |
| 10% | Amount lent | Loans from a company to its shareholders — deemed dividends |
| 0% | — | Dividends from foreign companies received by Panama residents — territorial exemption |
Residency
Residency trigger
The company withholds and the matter closes — dividends never enter the personal return; partnerships' after-tax profits are treated the same way at 10%.
Non-resident treatment
Foreign shareholders bear the identical 10%/5% final withholding; treaty relief requires applying to the tax authority within 30 days before the transaction.
Notes
- Companies that distribute less than 40% of after-tax profits (20% in free zones) face a deemed-distribution charge, which keeps dividend flows regular.
- Interest on bonds registered with the securities regulator carries a 5% final withholding, but goes untaxed when the paper trades through a licensed Panamanian exchange.
- Bank-deposit interest and Panamanian government securities are exempt income — the classic local savings mix pays no tax at all.
FAQ
What is Panama's dividend tax?
A final withholding of 10% on dividends from Panama-earned profits, 5% for foreign-source or export profits — nothing further to file.
Are foreign dividends taxed in Panama?
No — 0%. Dividends from foreign companies are foreign-source income, outside Panama's territorial tax.
Figures: tax year 2026, compiled from public sources. Not tax advice.