Countries › Panama › Guide › 6. Taxes › Capital gains tax in Panama: 10 percent on shares and real estate, the 5 percent and 3 percent advance payments and the 2026 new home transfer tax relief

Capital gains tax in Panama: 10 percent on shares and real estate, the 5 percent and 3 percent advance payments and the 2026 new home transfer tax relief

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Last verified: 2026-10-29 · Status: Changing

Gains on Panamanian source shares, bonds and other securities are taxed at a flat 10 percent, and the buyer must withhold 5 percent of the total price within ten days; the seller may treat that 5 percent as the final tax or claim back any excess. Real estate sold outside the seller's ordinary business is taxed at 10 percent of the gain with a 3 percent advance on the higher of price and cadastral value, plus the 2 percent transfer tax. Since 31 August 2026 the first sale of a new home within two years of its occupancy permit is exempt from transfer tax on the first B/.120,000.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates freely as legal tender; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Capital gains tax on Panamanian source shares and securities	10 %Código Fiscal art. 701 literal e, as of 2026-10-29 · in force
Buyer withholding on the total price of shares	5 %Código Fiscal art. 701 literal e, as of 2026-10-29 · in force
Capital gains tax on real estate outside the ordinary business	10 %Código Fiscal art. 701 literal a, as of 2026-10-29 · in force
Advance on the higher of price and cadastral value for real estate sales	3 %Código Fiscal art. 701 literal a, as of 2026-10-29 · in force
Real estate transfer tax (general)	2 %Ley 106 de 1974 art. 1 as referenced in Código Fiscal art. 701 literal a, as of 2026-10-29 · in force
Transfer tax exemption on the first sale of a new home	120000 PABLey 106 de 1974 art. 4 (Ley 546 de 2026), as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos), as of 2026-10-29 · in force

The rule

1. Gains on the sale of shares, quotas and other securities issued by legal persons that are taxable in Panama, including those from accepting a public tender offer, are taxed at a fixed 10 percent of the gain. The buyer must withhold 5 percent of the total sale price as an advance and remit it within ten days. The seller may treat the amount withheld as the final tax; if the 5 percent exceeds 10 percent of the gain, the seller may file a special sworn return and claim the excess as a cash refund or a non transferable tax credit. The gain is not added to the seller's other taxable income. Income from capital or securities invested economically in Panama is Panamanian source whether the sale happens in or outside Panama.
Example: Shares bought for B/.600,000 and sold for B/.1,000,000: 10 percent of the B/.400,000 gain is B/.40,000; the buyer withholds B/.50,000, so the seller either accepts B/.50,000 as final or claims B/.10,000 back. / US$1,000,000 sale, US$400,000 gain: US$40,000 tax, US$50,000 withheld, US$10,000 refundable or creditable.Código Fiscal art. 701 literal e as worded by Ley 18 de 2006 art. 2 and Ley 28 de 2012 art. 3, art. 701 literal e, 2012-05-08 official text · verified 2026-10-29

2. The 10 percent capital gains treatment with a 5 percent withholding by the buyer was introduced for securities by Ley 18 de 2006, which also taxes at 10 percent gains on other movable goods.Ley 18 de 19 de junio de 2006, art. 2 (Código Fiscal art. 701 literal e), 2006-06-19 official text · verified 2026-10-29

3. If a real estate sale is outside the seller's ordinary business, income tax is 10 percent of the gain, the difference between the real sale value and the basic cost plus necessary transaction costs. The seller either files a sworn return liquidating the gain or pays in advance 3 percent of the higher of sale value and cadastral value; the seller may treat the 3 percent as the final tax, and if it exceeds 10 percent of the gain may claim the excess as a refund or a transferable tax credit. Proof of payment of the income tax and of the 2 percent real estate transfer tax under Ley 106 de 1974 must appear in the deed before registration. The basic cost is the lower of cadastral value and book value.
Example: A warehouse sold for B/.500,000 with a cadastral value of B/.300,000: the 3 percent advance is B/.15,000, plus B/.10,000 of transfer tax at 2 percent of the sale value. / US$500,000 sale: US$15,000 income tax advance and US$10,000 transfer tax.Código Fiscal art. 701 literal a as worded by Ley 208 de 2021 art. 7 (text first introduced by Ley 28 de 2012 art. 2), art. 701 literal a, 2021-04-06 official text · verified 2026-10-29

4. For sellers in the business of selling property, the first sale of new homes and new commercial premises is taxed on the higher of sale value and cadastral value at 0.5 percent up to B/.35,000, 1.5 percent above B/.35,000 up to B/.80,000 and 2.5 percent above B/.80,000 for homes, and 4.5 percent for new commercial premises, for construction permits issued from 1 January 2010; the tax is paid before registration and replaces the 1 percent monthly advance and the estimated tax.Código Fiscal art. 701 literal a as worded by Ley 208 de 2021 art. 7 (text first introduced by Ley 28 de 2012 art. 2), art. 701 literal a, 2021-04-06 official text · verified 2026-10-29

5. The first sale of a new home is exempt from real estate transfer tax on the first B/.120,000 of the taxable base if formalized within two years of the occupancy permit. Between B/.120,000 and B/.200,000 the tax applies only to the excess at 0.50 to 1.80 percent by bracket; above B/.200,000 the exemption on the first B/.120,000 remains and the general regime applies to the excess. Contract clauses making the buyer bear the seller's transfer tax are void. The seller declares the facts under oath in the deed. Sales formalized after the law took effect may use the relief within 30 months of a permit issued earlier.
Example: A new apartment sold for B/.160,000 within two years of the occupancy permit: transfer tax applies only to B/.40,000 at the 1.40 percent rate for the B/.150,000 to B/.170,000 bracket, B/.560. / US$160,000 new home: US$560 of transfer tax.Ley 546 de 31 de agosto de 2026, amending Ley 106 de 1974 art. 4, art. 1 and art. 2 (transitory), 2026-08-31 official text · verified 2026-10-29 · changed: Ley 546 de 2026, in force the day after promulgation on 31 August 2026, replaced the earlier transfer tax exemption for new homes with a B/.120,000 exemption and a preferential scale up to B/.200,000.

Taxable base (B/.)	Rate on the excess over B/.120,000
Up to 120,000	Exempt
120,000.01 to 130,000	0.50 percent
130,000.01 to 150,000	1.00 percent
150,000.01 to 170,000	1.40 percent
170,000.01 to 190,000	1.60 percent
190,000.01 to 200,000	1.80 percent
Above 200,000	General regime on the excess over 120,000

Transfer tax scale on the excess over B/.120,000 for the first sale of a new home with a base up to B/.200,000 (Ley 106 de 1974 art. 4 as worded by Ley 546 de 2026).

Worked example

A foreign investor sells shares of a Panamanian operating S.A. for B/.1,000,000 (US$1,000,000); the shares cost B/.600,000.
The buyer withholds 5 percent, B/.50,000, and remits it within ten days. The real tax at 10 percent of the B/.400,000 gain is B/.40,000.
The seller can stop there and accept B/.50,000 as final, or file the special sworn return and claim B/.10,000 as a refund or as a credit usable only by itself.

Step by step

Before signing, establish whether the shares are Panamanian source (capital invested economically in Panama) and agree in the contract who withholds.
The buyer withholds 5 percent of the price and remits within ten days; the issuer is told of the transfer for its share register.
Decide whether to accept the advance as final or document the cost basis for a refund claim.
For real estate, pay the 3 percent advance (or file the gain return) and the 2 percent transfer tax before the deed is registered.
For new homes, include the sworn statement of Ley 546 de 2026 in the deed and report the exemption to the DGI.

Common traps

The basic cost of real estate is the lower of cadastral and book value, which can make the 10 percent computation worse than the 3 percent advance.
Indirect sales of Panamanian assets can still be Panamanian source, since the source rule looks at where the capital is invested, not where the sale occurs.
The credit from excess withholding on shares cannot be transferred, unlike the real estate credit.
Ley 546 de 2026 voids clauses shifting the seller's transfer tax to the buyer.

Sources

Related: Panama country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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