How capital gains tax works in Panama
Panama capital gains tax generally applies at 10% to gains from the sale of movable and immovable property, including securities and real estate, when the gain is Panama-source.
Securities disposals usually trigger a 5% withholding on the gross sale price as an advance against the gain tax. The seller can either accept that withholding as final or compute the actual gain and claim a refund of any excess.
Real estate sales have a separate mechanism; a 2% real estate transfer tax plus a 3% income tax advance on the higher of gross value or cadastral value, payable before registration. If the seller is a regular property developer, special rules can apply.
Tax rates at a glance
- Capital gains tax
- 10%General rate
- Securities WHT
- 5%
- Real estate transfer tax
- 2%
- Income tax advance
- 3%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
InvestorsTradersCrypto holdersHigh earnersFamily offices
Watch out for
- The 5% securities withholding is usually an advance, not always the final tax. Sellers with low actual gains may be able to claim a refund of the excess.
- Real estate has two layers to model; the 2% transfer tax and the 3% income tax advance, both of which can matter before title registration.
- If you are a tax resident elsewhere, Panama’s 10% capital gains rule does not protect you from foreign-country capital gains tax.
Frequently asked questions
Does Panama have capital gains tax?
Yes. The ordinary rate is 10% on taxable gains, with special withholding and advance-payment rules for securities and real estate.
How are securities taxed in Panama?
A buyer usually withholds 5% of the gross sale price as an advance payment, and the seller can settle the tax based on the actual gain.
How are property sales taxed in Panama?
Real estate sales usually involve a 2% transfer tax and a 3% income tax advance before the deed is registered.