Taxes for Pensionado retirees

Panama taxes income produced within its territory, from any source and wherever it is received. A pension paid from abroad by a foreign government, employer or fund is not income produced in Panama, and we found no rule that taxes it. No rule expressly calls it exempt either: the result follows from the territorial principle. Income you produce in Panama is a different matter: rent from a Panamanian property, a business here or fees for services performed here are Panamanian income.

Fiscal Code, articles 694 and 695

Holding a Pensionado permit does not by itself make you a tax resident of Panama. Tax residence is a separate test, based on the days you spend in the country and where you have your home.

Fiscal Code, article 762-N

What you still owe the United States is a question of US law, so ask a US tax adviser: Panama does not replace or release those obligations. What Panama does is apply the FATCA agreement with the United States: Panamanian banks identify accounts held by US persons and report them to Panama’s tax authority, which exchanges the information with the United States.

Law 47 of October 24, 2016, FATCA agreement, Official Gazette 28145-A

For clients from other countries, Panamanian banks apply the OECD Common Reporting Standard. They report accounts held by tax residents of other participating jurisdictions to the tax authority, which exchanges them with those jurisdictions. The report follows the tax residence you declare to the bank; the Pensionado permit does not change it. Canada, the United Kingdom and Spain are among the participating jurisdictions; the United States is not, because it is covered by FATCA.

Law 51 of October 27, 2016; Executive Decree 124 of 2017; DGI Resolution 201-5324 of July 15, 2026, Official Gazette 30587

A home registered as tax-protected family property or as your main residence is exempt from property tax when its assessed value, improvements included, does not exceed B/. 120,000; above that, tax applies only to the excess, by the legal table. Retirees, pensioners and people of retirement age may register their main home this way, though the law does not say whether a foreign pension counts. While the home is registered, its assessed value cannot be raised by official appraisals. Separately, any property assessed at up to B/. 30,000 is exempt. You apply to the tax authority; we confirm the documents for your case.

Fiscal Code, article 764, numerals 6 and 7, and article 766, as worded by Law 66 of October 17, 2017, Official Gazette 28388-C

It does not cover US or other foreign tax law, and it does not tell you whether a 401(k), IRA or annuity counts as a lifetime pension for the visa: that is decided under the immigration rules, which we check for your case.

• What counts as a pension