Panama: Domestic Corporate Taxation
Commercial License Tax
Companies carrying on business in Panama (not Free Zone companies or offshore companies) need to pay an annual Commercial License Tax of 2% of the net worth of the business up to a maximum of US$60,000). Free Zone companies are subject to an annual License Tax of 1% on the capital of the company (minimum US$100, maximum US$50,000). Licensed multinational headquarter companies and companies operating under special regimes relating to international contracts for Special Economic Zones such as the Howard Special Economic Area are excluded from the License Tax. Certain rural and/or small business are also exempt from the tax. In addition to the national business license tax, municipalities also levy similar taxes on businesses.