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Panama trust tax and reporting
Where you and your beneficiaries live shapes Panama trust tax and reporting as much as the trust itself. Which reporting duties apply to a trust held through a bank or trustee is a point your lawyer confirms for your case. This page shows what to ask your adviser. It is not tax advice.
Reviewed by a senior trust administrator, updated
Who reports to whom
The reporting flow for a Panama trust, with the source number for each item.
- Trusteekeeps records, files what the law requires
- Tax authorityreceives the returns and account information
- Partner jurisdictionsreceive data under automatic exchange where it applies
Key facts
- Trust structure
- A trust must be expressly declared in writing; verbal ones are invalid (art. 4)[1]
- Governing law
- Law 21 of 2017 (10 May 2017) on fiduciaries; Law 1 of 1984 on trusts[1]
- Foreign law rules
- A Panama trust may be run under foreign law if the deed says so (art. 38)[1]
- Reserved settlor powers
- A Panama trust is irrevocable unless the deed expressly says otherwise (art. 7)[1]
Numbers in brackets point to the Sources list at the end of this page.
Residency and what it changes
Tax on a fideicomiso follows the people involved. The homes of the settlor, the trustee and each beneficiary can change what is reported and to whom.
Your home country decides how it treats you as settlor. It also decides how it treats a distribution to you or to a family member as beneficiary.
A deed that looks efficient on paper may be taxed differently where you live, so your tax adviser should see the documents before you sign.
A later move to another country can change the position, so tell the trustee and your adviser when it happens.
We do not promise any tax outcome. How Panama taxes a trust is a point your lawyer confirms for your case.
Have the adviser check the local tax law, and say whether any local tax could reach the trust, its companies or its distributions.
CRS and FATCA reporting: what your lawyer confirms
Your lawyer confirms whether the Common Reporting Standard, under which banks and some trustees report account details, or FATCA, the US system for reporting accounts of US persons, reaches a trust in Panama.
If you are a US person, tell us in your first message. Extra checks apply, and your adviser’s input matters even more.
Reporting to tax authorities is a separate duty from the rules that govern the trustee, so ask your adviser which duties apply to you.
We collect self-certification forms for the trust and for any company it owns at the start, so reporting deadlines can be planned from day one.
What the trustee reports and when
The trustee keeps the trust’s accounts and records and handles the filings that apply in Panama. We set out which filings those are for your case.
Banks that hold trust accounts may report under CRS or FATCA, which your lawyer confirms for your case. Which party reports what depends on the structure and on the bank.
Reporting repeats each year, as a cycle of accounts, confirmations and, where they apply, filings.
The trustee tells you the dates that apply once the structure is set, and we put them in a calendar for you so you and your adviser can see each date in advance.
You can put the questions below to your adviser, and we can send the list of papers so that your adviser works from real documents.
Your adviser may also want to see how the trustee keeps records, so ask for that in your first message.
Your own tax position
Your own position is a question for your adviser, not for the trustee or for us. Bring them four things, in writing and in good time:
- The draft deed, in Spanish if it is drafted that way, and any letter of wishes.
- The assets you plan to move, with their values.
- The countries where you and each beneficiary live and pay tax.
- Plans to move abroad, sell a business or change the beneficiaries.
Ask them what you must report, by when, and what happens when you receive a distribution. Ask also whether your home country taxes income the trust earns.
Counsel and adviser should speak to each other, and the sooner the better. We send both the same drafts, so neither works from a summary.
If their views differ, ask them to settle the point in writing before you sign; a change after funding is slower and costs more.
Sources and review dates
The facts on this page cite articles 4, 7 and 38 of Law 1 of 1984. Law 21 of 2017 is listed from the same source entry. Your lawyer confirms how it applies to your deed.
Every other point is general guidance or a matter for your lawyer.
For the rules behind the structure, see the law and features page. For the steps, see the set-up guide, and for an overview return to the main guide. To start, contact us about Panama.
Frequently asked questions
Does a Panama trust report under CRS?
Which reporting duties fall on a trustee or bank in the country, including any under international information-exchange standards, is a point your tax adviser confirms for your case. Expect to complete self-certification forms for the trust and any company it owns, and ask your adviser what your home country requires.
Does my residency change the reporting for a trust in Panama?
Yes. Your home country decides how it treats you as settlor or beneficiary, and what you must file. The same trust can be reported differently in each country where a controlling person lives. Show your tax adviser the draft deed and the asset list before you sign.
Who do I ask about my own tax on a trust in Panama?
Ask a tax adviser who knows your home country, and give them the real documents: the draft deed, the asset list and the beneficiary details. We do not give tax advice and do not promise any tax outcome. We send your adviser the same drafts we send you.