Sales Tax in Panama

Find out about the taxes applied to your purchases in Panama...

Sales tax (or VAT) is seven percent in Panama and is called ITBMS (Impuesto a las Transferencias de Bienes Corporales Muebles y la Prestacion de Servicios). This rate applies to all goods and services except for food, medicine, and health services.

A 10 percent rate applies to hotels, other accommodation services, and alcohol. Tax of 15 percent is charged on tobacco products.

In order to supervise the charging, reporting and remittance of ITBMS, all businesses with an annual revenue of US$36,000 or more must have a special factura printer in order to provide a receipt to customers. Fines can be imposed on customers if they don't have the formal receipt from the vendor (although in practice this rarely happens). The fine can be a minimum of US$1 or seven percent of the purchase price. Businesses must also have copies of these receipts in order to deduct the expense from their tax returns.