Tax for expats in Panama: Canadians, Americans and NRIs — reasonably priced, fixed fee

Residence decides it, and residence is a question of facts rather than of where your post arrives. The one exception is US citizenship, which carries the filing obligation with the person wherever they go. So the first thing we establish is which system still claims you.

Possibly, and the version in force for your year is the one that matters — protocols and multilateral-instrument positions change what a treaty does without changing its name. We check it against the authority rather than a summary. Where no treaty applies, domestic relief takes over.

Where the property is. That is close to universal, and it usually arrives as withholding on the gross rent rather than as a return on the profit — which is why the election onto a net basis, where Panama offers one, is normally the first thing to check. Your home country taxes the same rent and credits what was paid.

Not by itself. Canada decides residence on ties rather than on address, so the question is what you kept: a dwelling available to you, a spouse or dependants still here, and the secondary connections such as accounts, cards and vehicles. Somebody who takes a residence permit in Panama, keeps a house in Ontario and returns for part of every year is often still resident here. Because Panama may not charge foreign income at all, a departure that has not actually happened for Canadian purposes leaves that income taxed at home with no foreign tax anywhere to credit against it. Territorial treatment abroad combined with unbroken residence at home is the worst of both outcomes.

Panama's system has territorial features, which means income arising outside the country may fall outside the local charge. That is a statement about Panama and nothing more. It does not stop the country the pension comes from taxing it at source, and it does not stop a country you remain resident of taxing it either. A pension paid from Canada to somebody living abroad is commonly subject to deduction when it is paid, and whether that deduction can be reduced depends on whether a treaty applies between the two countries and on your being able to evidence your status. Settle the residence question first; the pension treatment follows from it.

If you are resident in Canada or a citizen of the United States, ownership of a company abroad is reportable in its own right. The obligation does not depend on the company trading, distributing anything, or holding more than a bank balance. Dormant structures set up years ago for reasons nobody now remembers are the most common source of unreported holdings in this corridor. There may also be rules attributing the company's passive income to you as it arises, whether or not it is paid out. The first task is to establish what the company actually is — shares, directors, accounts, any assets — before deciding what has to be filed.

Almost certainly, somewhere. Territorial treatment answers only the Panamanian question. Every other country with a claim on you — the one you are a citizen of, the one you left, the one the income arises in — applies its own rules independently, and those rules do not stand down because Panama is not charging the income. Americans are the clearest case: the return follows citizenship, wherever you live. Canadians who have genuinely severed residence may be outside the Canadian charge on foreign income, but Canada still taxes income arising here, and the departure year has its own reckoning. The answer is never nowhere, and it should never be assumed.

Facts, in a settled order. The primary ties are a dwelling available to you, a spouse or common-law partner here, and dependants here. Secondary ties are the everyday attachments: bank and investment accounts, credit cards, a driving licence, health cover, professional and club memberships, furniture in storage. None is decisive alone, and a long list of small ties can outweigh a short list of large ones. What helps is a record made at the time — the date the home was sold or let on a genuine lease, the date the family moved, the cards cancelled, the licences surrendered. Assembled afterwards it is argument; assembled at the time it is evidence.

Yes. The American return follows citizenship rather than residence, so it continues for as long as you hold the passport, regardless of where you live or whether Panama charges anything. Relief mechanisms exist for income earned by working abroad and for tax paid to another country, but they are claimed on a return that has been filed. They are not automatic and they are not a reason to stop filing. Accounts held outside the United States carry their own reporting, separate from the return and on its own filing. Living somewhere with territorial features changes the Panamanian analysis and leaves the American one entirely intact.

On the same income, no — you cannot exclude income and then claim credit for foreign tax on the part you excluded. You can use both in one return on *different* income: exclude qualifying earned income, then claim credit for foreign tax on what remains, such as investment income or earnings above the cap. Which combination leaves you better off is an arithmetic question on your figures. Our FEIE vs foreign tax credit calculator works it through.

Yes. US filing follows citizenship, not residence or where the income arose, and the obligation continues for as long as the citizenship does. Two further obligations travel with it and are keyed to account balances rather than income, so they can apply in a year with no US tax at all: the foreign bank account report to FinCEN, and the specified foreign asset statement with the return. Most people who discover a problem discover it there. See two returns as a dual citizen.