Panama VAT Rates 2026
Panama (Panamá) levies Value Added Tax as ITBMS (Impuesto a la Transferencia de Bienes Corporales Muebles y la Prestación de Servicios). The standard rate is 7%, applied to most goods and services. Panama applies a single flat rate with no reduced rates.
Panama has no public registry we can query in real time, so a number cannot be confirmed as active from outside. The free VAT number validation tool still checks it against the national format, which catches transcription errors before they reach your accounting system.
Current rates — 2026
| Type | Rate | Applies to |
|---|---|---|
| Standard | 7% | Most goods and services |
| Zero-rated | 0% | Exports, food, medicines, school supplies (exempt) |
Registration and filing
| Registration threshold | USD 36,000Annual gross income below USD 36,000 exempts a business from charging ITBMS |
| Tax authority | Dirección General de Ingresos (DGI) |
| Filing frequency | Monthly returns, due by the 15th of the following month |
Access rates via API
The TaxID API returns current VAT and GST rates for 200+ countries and territories. Use the /api/v1/rates/PA endpoint to get Panama data programmatically. Responses are cached for 24 hours.
curl https://www.taxid.dev/api/v1/rates/PA
# No authentication required for rate lookups
# Response:
# { "country_code": "PA", "tax_type": "vat",
# "standard_rate": 7, "reduced_rates": [],
# "currency": "USD", "last_updated": "2026-06-12" }Fetching the rate in code
// Fetch current Panama VAT rates (no auth required)
const rates = await fetch('https://www.taxid.dev/api/v1/rates/PA').then(r => r.json());
// → { standard_rate: 7, reduced_rates: [],
// currency: 'USD' }
applyRate(rates.standard_rate);About Panama VAT
Panama's 7% ITBMS is among the lowest VAT-type rates in the Americas, fitting its dollarised, services-and-logistics economy built around the Canal and the Colón Free Zone — where re-exports move untaxed. Higher rates of 10% apply to alcohol and hotel accommodation and 15% to tobacco. Food, medicines and school supplies are exempt outright, and businesses earning under USD 36,000 a year stay outside the system entirely.
VAT in Panama is administered by the Dirección General de Ingresos (DGI).
Sources: PwC Worldwide Tax Summaries · DGI Panamá (accessed Jun 2026)
Rate history
- 2010ITBMS raised from 5% to 7% in the Martinelli fiscal reform
Frequently asked questions
What is the VAT rate in Panama in 2026?
7% ITBMS standard, with 10% on alcohol and lodging and 15% on tobacco; food and medicines are exempt.
Is the Colón Free Zone subject to ITBMS?
Re-export operations within the free zone are outside ITBMS scope — one reason Panama sustains such a low domestic rate.
Related concepts and guides: