Quick overview
| Standard Rate | Reduced Rate | Other Rates |
| 7% | N/A | 10%, 15%, exempt |
The local name for VAT in Panama is Impuesto a la transferencia de bienes corporales muebles y la prestación de servicios (ITBMS).
There are basically 3 VAT rates in Panama:
- Standard VAT rate is 7%
- Other VAT rates are 10% & 15%
Recent developments
For more information about (recent) rate change developments in Panama, please click HERE.
Standard rate: 7%
This rate applies for all transactions that take place in Panama, unless an exception applies (such as a reduced rate, the zero rate or an exemption, or a reason to treat the transaction as outside scope of VAT).
Other rates: 10% & 15%
Examples of goods and services taxable at 10%
- Alcoholic beverages, such as liquors and beers
- Hotels and other lodging services
Examples of goods and services taxable at 15%
- Cigarettes, cigars and other tobacco products
Examples of exempt supplies of goods, without the right to deduct VAT
- Supplies made by agricultural producers
- Unprocessed fish, meat and game supplied by nonindustrial fishermen and hunters
- Exported goods
- Medical and pharmaceutical products
- School materials
- Supplies of goods made in a free zone in Panama
- Supplies of movable goods within an authorized customs warehouse
- Oil and related products (motor oil is subject to VAT)
- Groceries
- Hand tools, fertilizers, insecticides, fungicides and similar products used in agriculture
A global VAT/GST rate overview can be found here (note this is a work in progress).
This post was last updated on October 2, 2021.
