I just submitted my permanent residency application to the Panama authorities. I was told that I should apply for tax residency status as well. Is this necessary? What are the advantages of becoming a tax resident of Panama? When should I apply for it?
Panama has a territorial tax jurisdiction, which means that only the income perceived in Panama is taxable. The benefit of being a tax resident depends on your country of citizenship or physical residency, and/or the countries where you perceive income, as you might obtain tax advantages by being a tax resident of Panama, but it varies from case to case. Once your residence is secured, you can become eligible to obtain a local tax id number and also apply for tax residency with the tax office.
By becoming a permanent resident in Panama, you may be solely subject to our taxation rules, which does not tax global income. The procedure and steps to take after obtaining permanent status in Panama will all depend on the nationality of the applicant.
The advantages depend on your citizenship, as well as your country of residency, the country where your family lives, etc.
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