Why Electric Vehicles Have 0% Import Tariff in Panama (and What You Do Pay)

If you’re considering buying an electric vehicle in Panama, there’s a key reason why many buyers compare local dealerships vs. importing: today there is a fiscal incentive that can bring the applicable tariff on EVs under HS code 87.03 to 0% through December 31, 2030. But that doesn’t mean “zero total taxes.” In practice, buyers still need to budget for 7% ITBMS (Panama’s sales tax) and other processing or handling charges depending on the specific transaction.

The key is understanding the terms correctly. In Panama, many people use “import tax” to refer to everything paid when bringing in a car. Legally, it’s not that simple. There are differences between tariffs, selective consumption taxes, ITBMS, and administrative or registration fees. And there are conditions: the tariff classification matters, hybrids don’t receive the same treatment as a pure EV, and the final tax calculation should always be validated for each specific model and case.

This article explains it clearly, without hype, with one practical takeaway: yes, an EV can enter Panama with 0% on that incentivized tariff line, but you still need to budget for ITBMS and processing costs. May vary by model/specification and regulatory changes.

How Did Panama’s EV Tax Framework Come About?

Panama has been promoting electric mobility as public policy for several years. Law 295 of 2022 (formally: Law No. 295 of April 25, 2022, Promoting Electric Mobility in Land Transportation) created an incentive framework to accelerate EV adoption, with its regulations published in Executive Decree No. 51 of February 15, 2023. Within that framework, the accessible legal text today confirms that pure electric land vehicles under HS code 87.03 (the international tariff classification code for passenger motor vehicles) carry 0% through December 31, 2030, and then 5% from January 1, 2031; for hybrids, the applicable reference is 10%.

In Panama, pure EVs classified under HS tariff code 87.03 carry a 0% import tariff through December 31, 2030, under Law No. 295 of 2022 — the first time Panama has established a dedicated fiscal incentive specifically for electric land vehicles.

However: 0% does not equal “pay nothing.” The 7% ITBMS is still the general applicable rate, and additional processing, registration, license plate, inspection, or handling charges may apply depending on how the transaction is structured and the specific tax assessment.

What Does “0% Import Tax” Actually Mean?

When a company or seller says “no import taxes” in Panama, the correct statement is to specify which charge is exempt. On this topic, the most accurate phrasing is 0% on the tariff incentive applicable to pure electric vehicles classified under HS 87.03, pursuant to Law 295 and the amendment to numeral 5 of Article 28-A of Law 45 of 1995.

If you want a quote with a clear, itemized breakdown, PideTuCarro separates each charge for you.

What is exempt or reduced for a pure EV (per reviewed sources):

• The incentivized tariff line for electric vehicles under HS 87.03 is listed at 0% through December 31, 2030.
• Vehicle license plate registration fees must be processed with a five-year exemption for new electric vehicles.

What you still pay or may apply:

• ITBMS 7%, the current general applicable rate.
• Other possible processing charges: registration, license plates, inspection, fees, or services related to import/customs clearance/delivery, depending on the case and provider. Panama’s Procuraduría de la Administración also noted in 2023 that the specific tax assessment and its interpretation falls within the competency of Customs and DGI.

In other words: selling the idea of “zero total” is misleading. The responsible statement is that an EV can benefit from 0% on the incentivized tariff line, but the buyer should request a complete quote including ITBMS and processing fees.

What Is the Legal Basis for the EV Tax Incentive?

The primary foundation is Law No. 295 of April 25, 2022, which promotes electric mobility in land transportation. This law created the general public policy framework and, in its fiscal provisions, amended numeral 5 of Article 28-A of Law 45 of 1995 (Panama’s basic customs and tariff law) to establish the tax treatment for electric and hybrid vehicles under HS code 87.03. Subsequently, Executive Decree No. 51 of February 15, 2023 regulated the law.

Under Panama Law 295 of 2022, municipalities are required to process a five-year exemption from vehicle license plate registration fees for new electric vehicles — an additional fiscal benefit on top of the 0% import tariff.

“Land electric motor vehicles under tariff code 87.03: 0% through December 31, 2030, and 5% from January 1, 2031…”

“…and for land hybrid motor vehicles under tariff code 87.03: 10%.”

“The municipalities of the Republic of Panama must process the exemption from vehicle license plate registration fees for a period of five years…”

An important nuance: a note from the Procuraduría de la Administración dated May 4, 2023, states that the concrete application of these charges falls within the competency of the National Customs Authority and, in tax matters, the DGI within their respective jurisdictions. That same note also emphasizes that the full exemption described by Law 295 applies to pure EVs and not to hybrids. For the buyer, this means one very practical thing: always validate the classification and final tax assessment for each specific case.

How Do Pure EVs and Hybrids Differ Under Panama’s Tax Rules?

Vehicle Type	Tax Treatment (per reviewed sources)	Practical Note
Pure Electric (EV) — HS 87.03	0% through 12/31/2030; 5% from 01/01/2031	The strongest incentive. Still budget for ITBMS and processing.
Hybrid — HS 87.03	10%	Does not receive the same benefit as a pure EV.
Gas/Diesel — HS 87.03	Not covered by this specific incentive	Assessed under the applicable general regime.

For a buyer in Panama, this difference is significant. If you’re comparing similar models, a pure EV may have a more favorable tax structure than a hybrid. Don’t lump all “eco-friendly” vehicles together — pure electric and hybrid receive different treatment.

Real Example: What to Expect in a Quote

Say you’re importing a 2025 electric vehicle. In a serious quote, you should see something like this (request a quote by model and case):

Item	Application
Vehicle value	Calculation base
ITBMS 7%	Applies
Processing / documentation / customs clearance	Per case
Registration / plates / delivery management	Per case
Incentivized tariff (HS 87.03)	0% through 12/31/2030

The key takeaway: don’t focus only on the “0%” — look at the total landed cost in Panama. At PideTuCarro, you may find savings of up to 30% vs. buying locally, but this may vary by model/specification. Never an automatic promise.

Why Did Panama Create the EV Import Incentive?

Panama’s motivation was not purely commercial. The public framework links electric mobility with emissions reduction, the energy transition, renewable energy use, and the modernization of land transportation. Decree 51 explicitly states this by connecting the policy to reducing greenhouse gas emissions, decreasing dependence on fossil fuels, and technological innovation.

The National Energy Secretariat also frames electric mobility within the Energy Transition Agenda 2020–2030, while MiAmbiente has presented Law 295 as part of measures to reduce transport sector emissions.

In plain buyer’s terms: Panama did this to make switching to EVs more viable, not to eliminate all payments. The goal is for more people and fleets to consider electromobility as a real option.

Buyer Checklist

Before importing or buying an EV, review this. You can also review frequently asked questions about EV imports in Panama for additional context.

1. Verify the vehicle is a pure electric vehicle, not a hybrid, if you want the most favorable treatment.
2. Confirm the HS tariff code 87.03 in the documentation.
3. Request a quote that separates vehicle cost, ITBMS, processing fees, and other charges.
4. Ask explicitly: “Which item is at 0% and which is not?”
5. Confirm the exact model year of the vehicle; at PideTuCarro we work with 2025 model-year vehicles.
6. Confirm the estimated delivery time: 1.5 to 2 months.
7. Ask about the local warranty: at PideTuCarro it is 1 year with PideTuCarro.
8. Review what is included in delivery and what remains the buyer’s responsibility.
9. Confirm whether the 5-year license plate fee exemption applies to your specific case.
10. Request documentary evidence of the current incentive and its validity date.
11. Verify the final quote before paying, as it may vary by model/specification and regulatory changes.

You can also learn how PideTuCarro works before taking the next step.

EV Tax Structure in Panama: Quick Reference

Pure Electric Vehicle (HS 87.03) : 0% import tariff through December 31, 2030; 5% from January 1, 2031

Hybrid Vehicle (HS 87.03) : 10% import tariff — not the same benefit as a pure EV

ITBMS : 7% general rate, applies on vehicle value in all cases

License plate registration : 5-year exemption for new electric vehicles (required by municipalities under Law 295)

Key deadline : December 31, 2030 — the 0% incentive window closes on this date

Frequently Asked Questions

Is it really 0%?

Yes, the reviewed legal sources show 0% for pure electric vehicles under HS 87.03 through December 31, 2030. But this should not be interpreted as “zero total” — the 7% ITBMS still applies separately, and there may be other processing charges.

What is ITBMS and how much is it?

ITBMS (Impuesto de Transferencia de Bienes Muebles y Servicios — Panama’s tax on the transfer of movable goods and services, equivalent to a sales tax or VAT). The current general rate is 7%, levied on the vehicle value.

How long does the incentive last?

Per the reviewed language, the 0% for EVs under HS 87.03 applies through December 31, 2030. From January 1, 2031, the rate becomes 5%.

Does it apply to hybrids?

Not the same way. The reviewed reference for hybrids under HS 87.03 is 10%, not 0%.

What about the warranty?

With PideTuCarro, the warranty is 1 year with PideTuCarro. The supplier does not offer a local warranty to the end customer.

How long does delivery take?

The estimated delivery time is 1.5 to 2 months, depending on the model and processing.

Is importing actually cheaper?

There may be savings compared to buying locally, but it is not guaranteed. At PideTuCarro you may find up to 30% savings vs. local dealers, but this may vary by model/specification.

What should I request before deciding?

A complete quote, the ITBMS breakdown, confirmation of vehicle classification, delivery timeline, and warranty terms.

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Last updated: March 9, 2026. May vary by model/specification and regulatory changes.