Guide · Taxes
Tax Residency in Panama
The difference between immigration and tax residency, how tax residency in Panama is proven and what to check in your home country.
- Updated
In short
Holding residency in Panama does not automatically make you a tax resident there, nor does it end your tax residency at home. Tax residency depends on where you spend your time and where you have your home and your interests, and each country decides it under its own rules.
How is it different from immigration residency?
Immigration residency is the permit to live in Panama. Tax residency determines where you are taxed on your income (see territorial taxation). You can have one without the other, and you can even be a tax resident of two countries at once: then any treaties between them decide.
When are you a tax resident of Panama?
In general, if you stay in Panama for more than 183 days, consecutive or not, in the tax year or the previous year (Article 762-N of the Tax Code, according to the DGI), or if your home and center of interests are in Panama. The tax authority (DGI) can issue a tax residency certificate to anyone who proves it (see how to apply for the certificate).
What should you check in your home country?
- Whether its law still considers you a tax resident even if you live abroad.
- Whether it taxes its citizens simply for being citizens, as the United States does, or applies exit taxes.
- Whether it has a double tax treaty with Panama.
- What you must report when you leave the country.
Frequently asked questions
What is the Panamanian tax residency certificate for?
To prove to other countries and to banks that your tax residency is in Panama. It does not replace any obligations you have in your home country.
Can I be a tax resident of two countries?
Yes. If both countries consider you a resident, the treaty between them, if there is one, decides which one prevails.
I'm a US citizen. Does moving to Panama end my US taxes?
No. The United States taxes its citizens on their worldwide income wherever they live, so you will normally keep filing US returns; US rules provide mechanisms to reduce double taxation, which you should review with a US tax advisor.