Panama ITBMS calculator
Add or remove Panama ITBMS at the rates in force.
Calculator inputs
Results
Enter your values and press “Calculate” to see the result.
Official source: Dirección General de Ingresos (DGI) ↗
In short
- What it calculates
- Add or remove Panama ITBMS at the rates in force.
- Formula used
Add: total = net × (1 + rate ÷ 100)- Example
- A product priced B/.1,000 before tax, at the standard 7 % rate:
Panama ITBMS calculator
In Panama the indirect tax on consumption is ITBMS (Impuesto de Transferencia de Bienes Muebles y Servicios), with a standard rate of 7%.
Panama inverts the usual logic: its 7% standard rate is among the lowest in the region, but it rises to 10% on accommodation and alcoholic drinks and to 15% on tobacco products. Food, medicines and education and health services are exempt.
This calculator works both ways: it adds the tax to a price without it and also breaks it out of a final price.
How it works
Enter the amount, choose whether to add or remove the tax and pick the rate. The rates available in Panama are: standard 7 %, reduced 10 % and increased 15 %.
If you need a rate other than those listed, choose “other rate” and type it in.
Formula
Add: total = net × (1 + rate ÷ 100)
Remove: net = total ÷ (1 + rate ÷ 100)
Tax = total − net
Worked example
A product priced B/.1,000 before tax, at the standard 7 % rate:
ITBMS amount: B/.70
Final price: B/.1,070
The other way round, starting from B/.1,070 tax included, the base is B/.1,000 again.
Explanation
It is called ITBMS, not VAT
The full name is Impuesto de Transferencia de Bienes Muebles y Servicios. Nobody in Panama says IVA: on an invoice, on a receipt or in conversation with an accountant it is always ITBMS.
A 7% standard rate and two higher ones
7% is the standard rate. Alcoholic drinks and hotel accommodation are taxed at 10%, and tobacco products at 15%. It is the mirror image of the European scheme: instead of reduced rates for essentials, there are increased rates for what the state wants to discourage.
What falls outside
Food, medicines, health services, education and passenger transport are exempt. That keeps the tax's impact on the Panamanian basic basket limited despite the absence of a reduced rate.
Dollar and balboa
The balboa is pegged one to one with the US dollar, and in practice dollar notes circulate. For the tax calculation it makes no difference which of the two appears on the invoice.
Frequently asked questions
Which ITBMS rates apply in Panama?
The rates built into the calculator are: standard 7 %, reduced 10 % and increased 15 %. Which one applies to a given product or service is set by Panama legislation; if in doubt, check with la Dirección General de Ingresos (DGI).
How do I remove ITBMS from a final price?
Choose the option to remove the tax and the calculator divides the final price by one plus the rate. Subtracting the percentage from the final price gives the wrong answer.
What is the difference between ITBMS and VAT?
None in mechanics: both tax consumption through charging and deduction. ITBMS is simply the Panamanian name for the tax.
Why do hotels pay 10%?
Panama applies increased rates to accommodation and alcoholic drinks, and 15% to tobacco, instead of creating reduced rates for essentials.
Need to calculate something else?
These tools are often used alongside this calculator.
VAT
Add VAT or sales tax to a net amount at whatever rate you need.
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the Dominican Republic ITBIS
Add or remove the Dominican Republic ITBIS at the rates in force.
Mexico IVA
Add or remove Mexico IVA at the rates in force.
VAT included
Break a tax-inclusive price down into the net amount and the tax.
Brazil ICMS
Add or remove Brazil ICMS at the rates in force.