Glossary · Taxes
ITBMS — Panama's 7% VAT
Definition
ITBMS is Panama's tax on the transfer of goods and services — the VAT equivalent — at a general 7% rate. In real estate it applies to services such as commissions, professional fees, and management; residential rents and used residential sales generally fall outside it.
In practice
For an owner or investor, the practical effect is on services: the broker's commission, legal fees, and the management fee are typically invoiced plus 7% ITBMS. When comparing quotes, always confirm whether the price cited includes it. Commercial leases are treated differently from residential — if your case mixes uses, confirm with an accountant before signing.
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Panama property tax guide →General information, not legal or tax advice. Every transaction is confirmed with an attorney and accountant.
Term reviewed as of July 2026 · Vaca Group Real Estate, Lic. PN 5904