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Panama Tax Information

7% ITBMS

ITBMS is 7% (10% for alcohol/tobacco). No income tax on foreign income. RUC required.

Freelancer Services to Invoice

  • Hourly consulting
  • Project-based work
  • Retainer agreements
  • Milestone billing
  • Rush/priority fees

Invoice Requirements in Panama

RUC number
DGI registration
Client RUC
Invoice number
ITBMS (7%)
Total in PAB/USD

Payment Terms

Net 14 or Net 30 is standard. Consider 25-50% deposits for larger projects.

Contado15 días30 díasCrédito

Payment Methods in Panama

Bank TransferBanco GeneralBanistmoCredit CardCash USD

Freelancer Invoice Tips

  • Always use a unique invoice number
  • Clearly state payment terms upfront
  • Include detailed breakdown of work
  • Add late payment fees
  • Keep copies for tax purposes

Frequently Asked Questions

What tax rate applies to freelancer invoices in Panama?

Panama has 7% ITBMS. ITBMS is 7% (10% for alcohol/tobacco). No income tax on foreign income. RUC required.

What payment methods are common for freelancers in Panama?

Common payment methods in Panama include: Bank Transfer, Banco General, Banistmo, Credit Card, Cash USD. Net 14 or Net 30 is standard. Consider 25-50% deposits for larger projects.

What should freelancer invoices include in Panama?

Your invoice should include: RUC number, DGI registration, Client RUC, Invoice number. For freelancer services specifically, also include: Hourly consulting, Project-based work, Retainer agreements.

How do I invoice for hourly freelance work?

List each task with hours worked and hourly rate. Include dates and detailed descriptions.

Should I charge a deposit as a freelancer?

Yes, especially for larger projects. A 25-50% deposit protects you from non-payment.

What is Panama's ITBMS rate?

Panama applies 7% ITBMS on most goods and services. Higher rates for alcohol, tobacco, hotels. Exports exempt.