# US taxes after you become Panamanian

If you are a US citizen, Panamanian nationality does not change your US tax obligations. US citizens are taxed on worldwide income wherever they live, so you keep filing a US return, and an FBAR and Form 8938 if your foreign accounts pass the thresholds. Your Panamanian bank reports US account holders under FATCA. Panama and the United States have no income tax treaty. This page explains what the official US sources say; for your own return, talk to a US tax professional.

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## Worldwide income, wherever you live

US federal regulations say all citizens of the United States, wherever resident, are liable to US income tax on income from sources within or without the United States. The IRS applies the same filing rules whether you live in the United States or abroad, and neither source makes an exception for dual nationals.

Source: 26 CFR 1.1-1, paragraph b; IRS, US citizens and resident aliens abroad, read October 28, 2026

## The foreign earned income exclusion

The FEIE lets you exclude income you earn by working abroad, not all your income. For tax year 2026 the IRS sets it at US$132,900, up from US$130,000 for 2025. You claim it on Form 2555.

To qualify, your tax home must be in a foreign country and you must either be a bona fide resident of a foreign country for an uninterrupted period that includes a full tax year, or be physically present outside the United States for at least 330 full days in any 12 consecutive months.

[Photo: Sandra Cohen-Rose and Colin Rose from Montreal, Canada](https://commons.wikimedia.org/wiki/File:Coronado_Beach_(4223439469).jpg)· [CC BY-SA 2.0](https://creativecommons.org/licenses/by-sa/2.0) Source: IRS, Foreign earned income exclusion; IRS, 2026 inflation adjustments; Instructions for Form 2555, read October 28, 2026

## The FBAR

Every US person with a financial interest in, or signature authority over, a financial account in a foreign country must report it to FinCEN when the combined value of all foreign accounts exceeds US$10,000 at any time during the calendar year. A Panamanian bank account is a foreign account for this purpose, whether or not it produces income.

The FBAR is FinCEN Form 114, filed electronically through the BSA E-Filing System and not with your tax return. It is due April 15 of the following year, with an automatic extension to October 15.

Source: 31 CFR 1010.350; IRS, Report of Foreign Bank and Financial Accounts, read October 28, 2026

## Form 8938

Form 8938 reports specified foreign financial assets with your tax return. If you live abroad, the IRS thresholds are higher.

| Filing status | Last day of the tax year | Any time during the year |
| --- | --- | --- |
| Not filing jointly | More than US$200,000 | More than US$300,000 |
| Filing jointly | More than US$400,000 | More than US$600,000 |

Source: IRS, Do I need to file Form 8938, read October 28, 2026

## Your Panamanian bank reports you

Panama has a FATCA intergovernmental agreement with the United States, Model 1, in force since October 25, 2016. Panama approved it by Law 47 of 2016, and Panamanian banks identify the accounts of US persons and report them to Panama’s tax authority, which exchanges the information with the United States.

Source: US Treasury, FATCA agreements list; Law 47 of 2016, Official Gazette 28145-A; Law 51 of 2016, article 11, Official Gazette 28149-B

## No income tax treaty

Panama does not appear on the IRS list of United States income tax treaties, and the United States is not among the treaties on the list of Panama’s tax authority. What the two countries have is a tax information exchange agreement signed on November 30, 2010.

Source: IRS, United States income tax treaties A to Z; US Treasury, Tax information exchange agreements, read October 28, 2026

## Naturalizing does not end US citizenship for tax purposes

For US tax purposes, a citizen relinquishes citizenship on the earliest of four dates the IRS lists, for example the day you renounce before a US diplomatic or consular officer, if the State Department later issues a Certificate of Loss of Nationality. Becoming Panamanian is not one of those dates.

If you do expatriate, the US expatriation tax treats a covered expatriate’s assets as sold at market value the day before. You are a covered expatriate if, among other cases, your net worth is US$2 million or more, or you cannot certify on Form 8854 that you met your federal tax obligations for the five previous years.

Source: IRS, Expatriation tax, read October 28, 2026

## And in Panama

Panama taxes income produced within its territory, whatever the nationality of the person who receives it, and defines tax residency by more than 183 days or a permanent home, not by nationality. Your carta de naturaleza does not change what you pay in Panama: you are taxed there on Panamanian-source income, as before.

Source: Panamanian Tax Code, article 694, restored by Law 1 of 2014, and article 762-N, as amended by Law 52 of 2012

## Questions people ask

### Do I still file US taxes after I become Panamanian?

Yes, as long as you remain a US citizen. US citizens are taxed on worldwide income wherever they live.

### Does my Panamanian bank account need an FBAR?

If the combined value of your foreign accounts exceeds US$10,000 at any time during the year, yes. A Panamanian account counts as foreign.

### Is there a US Panama tax treaty?

No income tax treaty. There is a tax information exchange agreement from 2010 and a FATCA agreement in force since 2016.

### Does the renunciation in my Panamanian oath end my US citizenship?

For US tax purposes, the IRS lists four dates on which citizenship is relinquished, and naturalizing in Panama is not one of them. Whether the Panamanian renunciation counts as an act of expatriation under US law is a question for a US lawyer.

## What the law does not say

- Whether the renunciation Panama asks for counts as an act of expatriation under US immigration law. The State Department pages did not load when we checked.
- Whether a Panamanian cédula helps prove bona fide residence for the FEIE. The IRS pages we read do not say.
- How a resident with no Panamanian-source income obtains the tax clearance certificate that naturalization asks for.
- Social security totalization between Panama and the United States.

## Official sources

- [U.S. Department of State, Dual Nationality](https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/Advice-about-Possible-Loss-of-US-Nationality-Dual-Nationality/Dual-Nationality.html)

Last verified: October 26, 2026

## Keep reading

- [Does Panama allow dual citizenship?](/dual-citizenship/)
- [After naturalization](/after-naturalization/)
- [How much it costs](/cost/)

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