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Transfer Pricing
TRANSFER PRICING IN PANAMA ARE COVERED BY ARTICLE 762-D OF THE TAX CODE
All Panamanian taxpayers who carry out transactions with related companies located abroad are subject to the presentation of Reports and Transfer Pricing Studies, provided that said transactions generate income, costs or deductions, for the purposes of Income Tax, of the period fiscal in which the transaction is declared or carried out.
This includes corporations with a Multinational Company Headquarters License (SEM) and Free Zones (Colon Free Zone, Panama Pacific, etc.). A Transfer Pricing Report must be completed that will contain information on the operations that the taxpayer has carried out, during a certain fiscal period, with related parties that are fiscal residents of other jurisdictions. The report must be submitted online through the e-Tax 2.0 system. It must be submitted within six months after the closing date of the fiscal period.
Transaction review
To carry out the Transfer Price Study, an in-depth review of the transaction is required to obtain a sufficiently clear understanding of the transaction.
An incorrect analysis can be the cause of an inadequate self-determination, therefore applying unprocessed transfer price adjustments to your tax returns by the General Directorate of Revenues (DGI).
The precise delimitation of the transaction implies clarity in the context in which it was carried out, which implies that the taxpayer must identify the parties involved in the transaction, as well as their interaction with the global value chain of the business.
To incorporate the Erosion of the Taxable Base and Profit Shifting (BEPS, Base Erosion and Profit Shifting), the DGI requests the corresponding information that must be provided in the report:
- Group consolidated financial statements, as well as a list of intangibles.
- The organizational, legal and operational structure of the economic group of which the Panamanian taxpayer is a member.
- Description of the functions, assets and risks of the group companies.
- Group transfer pricing in Panama policies.
- The most important products and services in the value chain.
Non-compliance
If the taxpayer does not comply with the obligation to present the Transfer Pricing Report within the established period, he will be sanctioned with a fine equivalent to 1% of the total amount of the operations with related parties. In any case, the fine will not exceed one million balboas (B /. 1,000,000.00).
Our staff is highly qualified and has extensive experience in Transfer Pricing in Panama. Our work team includes financiers, auditors and accountants, local and foreign, using only databases recognized by the tax authorities worldwide.