Panama Sales Tax Calculator 2026
Last updated: January 2026
The Transfer of Movable Goods and Services Tax (ITBMS) in Panama for 2026 has a general rate of 7%, administered by the DGI (Dirección General de Ingresos). Selective rates apply: 10% for alcoholic beverages and lodging, and 15% for tobacco products. Panama has one of the lowest general consumption tax rates in Latin America. Exempt items include basic food basket products, medications, educational services, health services, residential rent, public transport, and exports. To calculate ITBMS, multiply the base amount by 0.07. If the price includes ITBMS, divide by 1.07. Panama uses the US dollar (balboa is pegged 1:1) for all transactions. Small taxpayers with annual revenue under $36,000 are exempt from ITBMS.
FAQ
What is the ITBMS rate in Panama in 2026?
Panama's general ITBMS rate is 7%, one of the lowest in Latin America. Selective rates are: 10% for alcoholic beverages and lodging, and 15% for tobacco products. Most goods and services pay the 7% general rate.
What is ITBMS and how does it differ from IVA?
ITBMS (Impuesto de Transferencia de Bienes Muebles y Servicios) is Panama's consumption tax, equivalent to IVA. It taxes the transfer of movable goods, service provision, and imports. The name reflects Panama's specific legal framework but it functions identically to IVA.
What products are exempt from ITBMS in Panama?
Exempt from ITBMS: basic food basket items, medications, educational services, health services, residential rent, public transportation, exports, agricultural inputs, and financial services. Small businesses under $36,000 annual revenue are also exempt.
How is ITBMS calculated on an amount in Panama?
For the general rate: multiply by 0.07. On $1,000 the ITBMS is $70, total $1,070. For selective rates: multiply by 0.10 or 0.15. If the price includes 7% ITBMS, divide by 1.07 for the pre-tax amount. Panama uses USD (balboa = 1 USD).
When is ITBMS declared in Panama?
ITBMS is declared monthly to the DGI within the first 15 calendar days following the tax period. Declarations are filed electronically through the DGI's e-Tax 2.0 system. Small taxpayers with the simplified regime may file quarterly.