The Tax Residence in Panama

By: Amanda Barraza de Wong, Associate, Tax Law

With Panama being a jurisdiction whose tax system is based on the Principle of Territoriality, and whose economy revolves around financial, legal and logistic services… what policy should it have with regards to foreign capital? Certainly a policy for attracting direct foreign investment. Capital that provides financing for development itself. And that capital does not arrive alone; it is accompanied by natural or legal persons, which motivates the analysis of whether to consider them tax residents or not.

In Panama, we have specific criteria to determine after a study of each particular case, whether a natural or legal person can be considered a tax resident under the provisions of both the Tax Code and the Treaties to Avoid Double Taxation in force. 

Tax residence certificate

The residential tax certificate is the document that accredits a person, being a natural or legal person, his/her tax residence in our country and it is only issued by the General Directorate of Revenues (DGI) based on article 762-N of the Tax Code, Executive Decree 958 of 2013 and regulatory resolutions.


The basic requirements established by the DGI for the issuance of the Tax Residence Certificate in the Republic of Panama are the following, in addition to the criteria that underlie the analysis:

  1. Petition addressed to the DGI containing:
  • Clear and express identification of the applicant.
  • Specification of the tax treaty or agreement to which it wishes to be allocated, when applicable.
  1. Original Public Registry Certificate, in the case of legal persons.
  2. Copy of identity card or passport of the applicant or the Legal Representative.
  3. Power of attorney, in case of legal persons.
  4. Other relevant evidence.


Since the fiscal year 2010, there have been several regulations issued on this concept; it is a topic that has been developed particularly over time and we believe that it will continue to evolve.