Panama VAT / Sales Tax
Detailed vat / sales tax rates and rules for Panama in 2026.
Panama levies a 7% transfer of movable goods and services tax (ITBMS, similar to VAT) on most goods and services. Higher rates of 10% apply to alcoholic beverages and hotel accommodations, and 15% to tobacco products. Essential goods including basic foods, medicines, and educational materials are exempt. Professional services, financial services, and residential rental are also exempt. The ITBMS threshold for mandatory registration is relatively low, and monthly returns are required for registered taxpayers.
Standard Rate
7%
Registration Threshold
Annual gross revenue exceeding USD 36,000
Reduced Rates
How Panama VAT / Sales Tax compares
Panama’s standard VAT / sales tax rate of 7% is the 166th highest of 203 countries TaxAtlas tracks, below the global average of 13.7% and North America’s regional average of 10.4%.
