Overview of Panama Tax Supported in Kintsugi

Kintsugi supports sales tax compliance for Panama, specifically for businesses that have a physical presence in the country. This article gives you a quick overview of what Panama tax support looks like on the Kintsugi platform.

What is Panama's tax system?

Panama applies a national consumption tax called ITBMS (Impuesto de Transferencia de Bienes Muebles y Servicios), which is the Panamanian equivalent of VAT or GST. The standard rate is 7%, and it is administered exclusively at the national level by the DGI (Dirección General de Ingresos, or General Directorate of Revenue).

There are no regional or local tax layers in Panama. If a transaction is taxable, the 7% rate applies uniformly across the entire country.

What does Kintsugi support for Panama?

Kintsugi currently supports Panama compliance for businesses with physical nexus. Here is what is included:

• Nexus monitoring (physical nexus, collected tax nexus, and economic nexus)

• New registration submissions

• Registration imports

• Tax engine to calculate and collect taxes on B2B SaaS and B2C SaaS transactions

• Filing returns

Important: Kintsugi supports Panama only for businesses that have physical nexus in Panama. Non-resident businesses with no physical presence in Panama are generally not required to register for ITBMS/VAT for SaaS services.

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