Filing Personal Income Taxes in Panama: Complete Step-by-Step Guide

Overview of Panama's Tax System

Panama's territorial tax system taxes only Panama-sourced income, making it attractive for those with foreign income. However, if you establish tax residency in Panama, you must file a personal income tax declaration annually. This comprehensive guide walks you through the entire process of filing your taxes online through the DGI (Dirección General de Ingresos - General Department of Income) system.

Step 1: Access the DGI Website and Log In

Your first step is to find and access the official tax authority website. The Ministry of Economics and Finances oversees tax collection through the DGI.

Steps to Log In:

1. Visit the DGI website at dgi.mef.gob.pa
2. Look for the orange button labeled "DGI EN LÍNEA"
3. Click this button to open eTax2.0 (you may need to allow popups depending on your browser)
4. Select the orange button that says "INICIAR SESIÓN" (Log In)
5. Enter your USUARIO/RUC (user identification/business registration number)
6. Enter your NIT (national tax ID number)
7. Complete the security verification: Select "No soy un robot" (I'm not a robot)
8. Select the images that match the word provided if requested (use Google Translate if needed)
9. Click the orange "INGRESAR" button to enter the system

Step 2: Open and Complete the Tax Declaration Form

Once logged in, you'll access the tax declaration form. This form collects your income information and calculates your tax obligation.

Locating the Declaration Form:

1. On the left side of your screen, select the grey and white icon showing a piece of paper with a pencil
2. This opens a menu—select "DECLARACIONES JURADAS Y DOCUMENTOS" (Sworn Declarations and Documents)
3. Select "PRESENTAR DECLARACIÓN JURADA" (Submit Sworn Declaration)

Filling in Declaration Parameters:

1. Under PARAMETROS DE PRESENTACIÓN, verify that the RUC, DV (check digit), and CONTRIBUYENTE (taxpayer) fields are pre-filled
2. Under DECLARACIÓN, select "1-DECLARACIÓN JURADA DE RENTAS PERSONAS NATURALES, ASALARIADOS, PROFESIONALES INDEPENDIENTES Y COMERCIANTES" (Declaration of Income for Natural Persons, Employees, Independent Professionals, and Merchants)
3. Under PERIODICIDAD, select ANNUAL
4. In the AÑO field, enter the year you're filing for (e.g., 2024)
5. Click "ACEPTAR" (Accept) to proceed

Step 3: Verify Your Information and Tax Declaration Details

The system opens a new page where you'll verify and configure your tax declaration. Accuracy here is crucial for proper tax filing.

Verification Checklist:

1. Under SISTEMA CONTABLE, select "RECIBIDO" (Received)
2. Verify the PERIODO INICIAL (starting period) and PERIODO FINAL (ending period) - these should match the tax year
3. Under TIPO DE DECLARACIÓN, select "NORMAL" (Normal Declaration)
4. Under NORMAS CONTABLES, select "NIIF" (International Financial Reporting Standards)
5. Under TIPO DE PRESENTACION, select "ORIGINAL" (Original Filing)

Step 4: Enter Income and Submit Your Declaration

The final step involves entering your actual income information and submitting your completed tax declaration.

Income Entry and Submission:

1. In the first line below the blue bar labeled INGRESOS (Income), enter your salary and other taxable compensation
2. Include all sources of Panama-sourced income
3. If you have multiple income sources (employment, business, investments), enter each separately
4. Review all information for accuracy
5. Click "PRESENTAR" (Submit) to file your tax declaration

Special Situations and Complex Income Sources

If your income comes from sources such as investments, real estate, cryptocurrency, or offshore accounts, you may need to submit your declaration differently or provide additional documentation. Similarly, if you have deductions or special circumstances, consult with a tax professional.

When to Seek Professional Help

If you:

• Are filing taxes in Panama for the first time
• Have income from multiple sources (employment, business, investments, real estate, cryptocurrency)
• Are unsure how to categorize certain income
• Have significant deductions or complex financial situations
• Have offshore income or accounts
• Are establishing tax residency and need guidance

It's wise to contact a tax professional or attorney who specializes in Panama taxes. They can ensure your filing is accurate and optimize your tax position.

Key Takeaways

• Timing: File your annual tax declaration before the deadline each year
• Required Information: Have your USUARIO/RUC, NIT, and income documentation ready
• System: Use the eTax2.0 system through the DGI website
• Language: The system is in Spanish; use translation tools if needed
• Complex Income: Seek professional advice for investments, real estate, and offshore income
• Accuracy: Double-check all information before submitting

Conclusion

While filing taxes in Panama requires navigating a Spanish-language system and understanding local tax rules, the process is straightforward once you know the steps. This guide provides the roadmap. For those establishing Panama residency or dealing with complex income sources, professional tax guidance ensures compliance and optimal tax planning. Panama's territorial tax system offers significant advantages for remote workers and entrepreneurs with foreign income—understanding how to properly file ensures you can take full advantage of these benefits.