Taxes in Panama: The Halt of Digital ITBMS and Its Fiscal Impact in 2026
The stability of taxes in Panama remains a fundamental pillar for entrepreneurs who decide to relocate their assets to the isthmus. Recently, the Executive decided to temporarily suspend the bill that sought to tax services and products of the digital economy with 7% of the Tax on Transfer of Movable Goods and Services (ITBMS). This measure, which aimed to collect around 100 million dollars annually by taxing giants like Netflix, Amazon, or Uber, has been frozen after strong pressure from civil society and the business sector.
Key Updates in 1 Minute
- Project Suspended: The 7% ITBMS levy on foreign digital services is indefinitely frozen.
- User Stability: There will be no immediate price increase for software licenses, cloud servers, or technology transportation services.
- Legal Certainty: The government dismisses the need to create new substitute revenues to maintain current real estate exemptions.
The Context of the Proposal: Why Was This Digital Tax Considered?
The initial plan of the Ministry of Economy and Finance was to capture fresh resources from the digital economy to offset the fiscal sacrifice of eliminating the Real Estate Transfer Tax (ITBI) for social housing. However, subsequent technical analysis determined that, constitutionally, it is not mandatory to seek revenue replacement if these were not originally contemplated in the national budget.
Did Panama truly need this tax? The administration identified that digital revenue collection is a global trend, but taxing the consumption of software and logistics platforms generates a direct inflationary effect on middle-class families and independent professionals.
Comparative Table: Current State of Digital Taxation vs. Frozen Proposal
To better understand the scenario that remains in effect during this year 2026, let’s look at the tax structure for these activities:
| Concept or Platform | Current Situation (No Changes) | Reform Proposal (Frozen) |
|---|---|---|
| Subscriptions and Software (Netflix, Amazon Web Services, Zoom) | 0% ITBMS | 7% direct surcharge |
| Mobility and Lodging Platforms (Uber, Airbnb) | Exempt from direct transactional ITBMS | 7% credit card withholding |
| Purchases of merchandise from foreign e-commerce stores | Subject to regular import customs tariff | Additional 7% digital ITBMS at the payment gateway |
The decision not to proceed with this scheme prevents local banks from having to act as mandatory withholding agents on every international credit card payment. This greatly simplifies the daily accounting of corporations established in the country.
“The flexibility and responsiveness of the Panamanian authorities send a message of reassurance to foreign capital: fiscal competitiveness will not be altered unilaterally or hastily.”
PanamaWay’s Analysis: What Does This Mean for the International Investor?
Many of our clients looking to start a company in Panama base their business model on cost optimization and the use of international technological tools. Keeping ITBMS separate from foreign digital services preserves one of the most competitive operational cost structures in the Latin corporate region.
Last month, a European client dedicated to e-commerce raised their concern. They feared that their payment gateways and servers contracted abroad would suffer automatic 7% withholdings by Panamanian banks, which would reduce their net margin. After analyzing their case with our legal team, we restructured the payment flow of their Panamanian limited company. With the suspension of the bill, their structure not only remains secure, but their financial projection for this year is consolidated without unforeseen costs.
Panama continues to firmly uphold the principle of territoriality. Money generated outside Panamanian territory does not pay income tax, and the consumption of digital services from abroad will not become more expensive through indirect fiscal means. It is an ideal environment for digital nomads, service exporters, and multinational headquarters.
If you wish to structure your assets under this framework of high legal certainty and stability, let us analyze your relocation case without obligation and design a strategy tailored to your family and corporate needs.