Hi Oliver,

If you carefully read the IRS documentation, you’ll see that what matters is *where you physically are while performing the work*, regardless of who you are performing the work for. If you are working for a US company remotely, you will still owe social security and medicaid (15.3% total, half paid by your employer) on the first ~128k I think, but you will owe no income tax on the excluded amount (~106k). This basically means that on a $100k salary you’ll pay approximately $7500/yr to the US while living in Panama.

The Panama tax authorities take the opposite view — to them it matters not where you are while performing the work, but whether or not the income comes from Panama territory.

Basically you get the best of both systems — Panama doesn’t care about money from outside of Panama, while the US doesn’t care about work done while outside of Panama.

Hope this clears things up.

Software developer, investor, energy markets analyst.

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