Moving to Panama from Canada: Visas, CPP/OAS Tax, Flights

Panama makes a lot of sense for a Canadian, and three things are why. Copa Airlines flies nonstop from Toronto Pearson and Montreal-Trudeau, seven times a week from each, a little under six hours in the air, so family visits stay a single travel day in both directions. Canada is named among the 50 countries on Panama's Friendly Nations list under Decreto Ejecutivo 226 de 20 julio 2021, which puts the B/.200,000 property route to permanent residency on the table for you. And Panama uses the US dollar and taxes on a territorial basis, so your budget never passes through an exchange rate and foreign-sourced income generally stays outside Panama's tax net.

There is one number a Canadian should plan around, and it is worth knowing before you book the scouting trip rather than after. Canada withholds 25% of every CPP and Old Age Security payment it sends to a resident of Panama, because the two countries have never signed a tax treaty. That is a planning item, not a dealbreaker, and this guide gives it a full section with the actual arithmetic, the election that can lower it, and the forms CRA expects on the way out. Everything else about your move, the visa thresholds, the transfer tax, the shipping allowance, works exactly the same for you as for anyone else.

Key takeaways

• Copa flies nonstop from Toronto and Montreal, seven times a week from each, just under six hours. Every other Canadian city connects through a third country. Flight-schedule data, checked August 2026.
• Canada appears on Panama's 50-country Friendly Nations list, under Decreto Ejecutivo 226 de 20 julio 2021, opening the B/.200,000 property route to permanent residency. Confirm your own eligibility with a Panama immigration attorney before you file.
• CPP and OAS are withheld at Canada's standard non-resident rate of 25% for a Panama resident, versus 15% for a resident of the US under the Canada-US treaty. Canada Revenue Agency, Part XIII non-resident tax.
• Canada and Panama have a tax information exchange agreement rather than a tax treaty. Signed 17 March 2013, in force 6 December 2013, with no withholding-rate provisions. Government of Canada Publications, checked August 2026.
• A non-resident RRSP withdrawal is withheld at a flat 25%, and for most non-residents that is the final Canadian tax on the money, not a down payment on a bigger bill. CRA, Part XIII.
• Panama's own thresholds are passport-blind. Pensionado at B/.1,000 a month, or B/.750 with more than B/.100,000 in Panamanian property; Friendly Nations at B/.200,000; Qualified Investor at B/.300,000; a 2% seller-filed transfer tax; a B/.25,000 duty-free household-goods allowance.

What is Canadian about this move, and what is not

The right way to read that table: the top half is worth an hour with a Canadian cross-border accountant before you go, and the bottom half is the same process every foreign buyer in Panama runs, priced identically whatever passport you hold.

Planning around the 25% withholding

A tax treaty does two things a retiree cares about. It sets a reduced withholding rate on pension income crossing the border, and it coordinates which country taxes what so the same dollar is not taxed twice. Canada has roughly 90 of them. Panama is not among them.

What the two countries signed, on 17 March 2013, is an Agreement for Tax Cooperation and the Exchange of Information relating to Taxes, in force since 6 December 2013. It lets the two governments share tax records on request. It contains no pension article and no withholding schedule, because that is not what it was written to do.

So Canada's default applies. Part XIII of the Income Tax Act withholds 25% from pension income paid to a non-resident, and with no treaty to reduce it, 25% is what a Panama resident sees. A retiree resident in the US pays 15% on the same income, because the Canada-US treaty specifically lowers it.

Put a real pension through it rather than a round number. Service Canada publishes the average CPP retirement pension at age 65 as $877.01 a month, as of April 2026, against a maximum of $1,507.65 in January 2026. OAS tops out at $751.97 a month for ages 65 to 74 in the July-September 2026 quarter. A retiree drawing an average CPP payment and close to full OAS, call it $1,630 CAD combined, gives up about $407 CAD a month to withholding as a Panama resident, against about $244 for the same retiree living in the US. Budget the $163 difference and the surprise is gone.

Two things soften it. Panama's territorial system means that pension, once it lands, generally is not taxed again on Panama's side, and Panama's residents from age 55 for women or 60 for men get the Ley 6 discount list on restaurants, hotels, flights, medicine and professional fees, which is real money against a fixed income. Our retirement guide sets those discounts out in full.

There is also a narrower fix on the Canadian side. Non-residents can apply to have withholding reduced under a Section 217 election, where total income is modest enough that graduated Canadian rates would tax the money less than the flat 25%. It will not get a Panama resident down to the US retiree's 15%, but in the right income band it lands below the flat rate, and for a retiree whose only income is CPP and OAS it is worth a cross-border accountant's hour to check. The general election exists; whether it helps depends on your numbers.

RRSP: the withholding is flat, and usually final

Two different sets of RRSP rules get conflated constantly, and the difference is worth money to you. For a Canadian resident, withholding on a lump-sum withdrawal scales with the amount, up to 30% on the largest ones, and it is a down payment against your eventual bill at your marginal rate. For a Canadian non-resident, Part XIII sets a flat 25% regardless of the amount, and for most non-residents that withholding is the final Canadian tax owed on the withdrawal. Nothing is layered on top the way it would be for a resident.

That is a lower number than the 40%-plus figure that circulates, and knowing it changes the decision. It also does not make an early withdrawal automatically smart: a quarter of the money is gone before it reaches you and the contribution room does not come back. If you are weighing an RRSP draw to fund a purchase in Panama, price the alternative first and run both past a cross-border accountant, who is the right professional for this question. A Panama relocation firm handles housing, banking introductions and paperwork sequencing, which is a different job.

Leaving Canada: the two forms, correctly named

CRA's departure process runs through two forms, and getting the names right saves a round of correspondence.

Form NR73, Determination of Residency Status (Leaving Canada), is what you file if you want CRA's own position on your departure date. It earns its keep when your ties to Canada are ambiguous, say you keep a house or a spouse stays behind for a year.

Form T1161, List of Properties by an Emigrant of Canada, captures the deemed disposition: properties with a combined fair market value over $25,000 CAD at the time you leave, with cash, pensions and RRSPs excluded. There is no fixed 30-day deadline attached to a specific dollar penalty. Both go in with your tax return for the year you leave.

Your departure date is the day you sever residential ties with Canada, which CRA determines on the facts, not the day your Panama visa clears. Plan the two on separate calendars.

Getting there: two cities, one airline

Copa Airlines runs the only nonstop service between Canada and Panama City, from Toronto Pearson (YYZ) and Montreal-Trudeau (YUL), about seven flights a week from each, a little under six hours in the air. Vancouver, Calgary and everywhere else connects through a third country, commonly the US or Bogotá, which stretches the trip past twelve hours each way.

If you are in Ontario or Quebec, that nonstop is one of the strongest practical arguments for Panama over the alternatives, and it makes a scouting trip a long weekend rather than a project. If you are flying from the west, build the connection into your plans and treat scouting trips as fewer and longer.

Panama's side, which works the same for everyone

Three residency routes are open to Canadians, all sourced in full on our residency guide.

Pensionado wants a lifetime pension of B/.1,000 a month, or B/.750 if you own more than B/.100,000 of Panamanian property. CPP and OAS are pension income for this purpose, and this is the route most retired Canadians take.

Friendly Nations is the property route, at B/.200,000, and Canada is named among the 50 countries on the list under Decreto Ejecutivo 226 de 20 julio 2021. Country lists get amended by decree, so have your immigration attorney confirm Canada's current position when you file. It suits Canadians who are buying anyway and want residency to follow the purchase.

Qualified Investor sits at B/.300,000 and buys speed rather than a different outcome. It fits buyers whose budget is already there.

On the buying side, the transfer tax is 2% and the seller files it, so it is not a line in your closing budget. That and the rest of the purchase sequence is on the buying guide. For the move itself, a new resident gets a B/.25,000 duty-free household-goods allowance, reduced to B/.10,000 when claimed specifically through Pensionado, and pets face a forty-day quarantine that can usually be served at home. Both are on the moving guide.

One naming note that saves confusion in your paperwork: Panama's immigration authority is the Servicio Nacional de Migración, and that is the agency name your attorney will use throughout.

Which route fits you

• Retired, drawing CPP and OAS, want the simplest path: Pensionado, with a Section 217 conversation booked before you go non-resident.
• Buying a home anyway, and want residency attached to it: Friendly Nations at B/.200,000, with your attorney confirming the country list at filing.
• Flying from Toronto or Montreal and still deciding on a town: scout on the nonstop, rent for a season, and read the town-by-town comparison first.
• Flying from Vancouver or Calgary: fewer, longer trips, and line up viewings before you fly so a single visit does the work of two.

Your next step

Panama rewards Canadians who arrive with the Canadian paperwork already settled, and that is a shorter list than it looks: one accountant conversation, two CRA forms, and a booking out of Toronto or Montreal. The Panama half we can do with you. Tell us your budget, your timeline, and whether you are leaning coast or mountains, and we will come back with a shortlist of towns and actual properties that fit. The form below is where to start, and asking costs nothing.

Frequently asked questions