The General Directorate of Income ("DGI") of the Ministry of Economy and Finance adopted on March 7, 2018 Resolution No.201.1254 which provides that corporations constituted in the Republic of Panama must register with such institution, obtain a Tax Identification Number (RUC), describe its commercial activity as either:


a)       ISR Income of Panamanian source, or

b)      Income from non-Panamanian source (not obliged to declare).


ISR stands for Income Tax.


Companies that receive income from Panamanian source must register in Class A.


Companies constituted solely to hold a real estate property and that will not receive income or which income is derived 100% from foreign sources must be registered in Class B.

Panama’s tax system is territorial. Only corporations, private interest foundations and natural persons that obtain income from Panamanian sources are obliged to prepare and file tax income declarations.