Law 189 of 2020 – special tax regime in Panama

On December 17, 2020 the tax code was reformed to create a special income tax regime for micro, small and medium enterprises, with the objective of favoring businessmen and entrepreneurs in Panama.

The income tax to be paid varies as follows depending on the total income of the company and whether it is a legal entity or a natural person.


In the case of a legal entity:

Total Income Tax Payable on Net Taxable Income
Hasta B. 11,000.00 7.5%
B. 11,000.01 a B. 36,000.00 10%
B.36,000.01 a B. 90,000.000 12.5%
B.90,000.01 a B. 150,000.00 15%
B.150,000.01 a B. 350,000.00 20%
B. 350,000.01 a B.500,000.00 22.5%

The companies that must comply with these taxes are those that:

  • Are registered in the Ampyme Business Registry.
  • Receive annual gross income that does not exceed five hundred thousand balboas.
  • Its shares and participation quotas are nominative and its shareholders or partners are natural persons.

In the case of a natural person:

Total Income Tax Payable on Net Taxable Income
Hasta B. 11,000.00 0%
B. 11,000.01 a B. 36,000.00 7.5%%
B.36,000.01 a B. 90,000.000 10%
B.90,000.01 a B. 150,000.00 12.5%
B.150,000.01 a B. 350,000.00 17.5%
B. 350,000.01 a B.500,000.00 22.5%

The companies that must comply with these taxes are those that:

  • Are registered in the Ampyme Business Registry.
  • Perceive annual gross income that does not exceed five hundred thousand balboas.

For more details on Law 189 of 2020 see here:


Law 189 of 2020


Related pages:

Published December 20th, 2020, as Laws on Tax by Johana Sum