Panama has acquired a reputation as one of the world’s most popular tax havens as it offers a 100% tax exemption. Panama Foundations enjoy an exemption from tax reporting as a result of Panama’s tax regime while the following taxes are not applicable: income tax, capital gains tax, sales tax, beneficiaries tax, beneficiary transfer tax, capital tax, property tax (for non-Panamanian property), estate tax, gift tax, inheritance tax, stamp tax, succession tax and inventory tax.
While Panama Foundations do not pay the various taxes listed above, they have to pay the Panama Corporate Franchise Tax which is $400 annually. Foundations incorporated between the dates of January 1 and June 30 have a deadline of July 15 to pay the tax while those incorporated between July 1 and December 31 have a deadline of January 15. A late penalty fee of $50 is imposed for any year unpaid for by defaulters and if one deadline period passes without payment, then the entity will be charged a further $300 late penalty fee. The $300 later penalty fee will continue to be charged for each additional deadline missed without clearing payment.