How dividend tax works in Panama
Panama does not have a separate personal dividend tax regime like some countries, but corporate distributions are subject to withholding at the company level.
The standard dividend withholding tax is 10% on Panama-source profits. A 5% rate can apply to distributions from exempt income or foreign-source income, while bearer shares can trigger a 20% rate.
{ "If a company does not distribute enough dividends, the complementary tax can apply": "40% of net profits for the 10% regime and 20% of net profits for the 5% regime are the relevant benchmarks." }
Tax rates at a glance
- Standard dividend WHT
- 10%Panama-source
- Exempt / foreign-source
- 5%
- Bearer shares
- 20%
- Payment deadline
- 10 days
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
InvestorsHolding companiesRemote foundersFamily officesRegional operators
Watch out for
- Dividend withholding is separate from corporate tax and usually payable within 10 days of payment or crediting, so cash-flow timing matters.
- Loans or credits from the company to shareholders can be treated like dividends for withholding purposes.
- Treaty wording can change the default rate, so cross-border dividends need treaty and residence checks before payment.
Frequently asked questions
Does Panama tax dividends?
Yes. Panama generally withholds 10% on Panama-source dividends, with different rules for exempt income, foreign-source income and bearer shares.
Does Panama have dividend withholding tax?
Yes. The company usually withholds the tax before paying or crediting dividends and remits it to the DGI within 10 days.
Are foreign dividends taxed in Panama?
Foreign-source dividends are generally not taxed again as personal income in Panama, but the company-level withholding rules and your home-country tax still matter.