In the current context of international tax enforcement, compliance with Transfer Pricing obligations has become essential to the tax management of corporate groups.
In Panama, one of the main formal obligations in this area is the Transfer Pricing Report (Form 930), regulated by Article 762-I of the Tax Code, which is a key tool for monitoring related-party transactions.
Scope and Nature of the Obligation
Form 930 is an annual information statement to be filed before the DGI (Dirección General de Ingresos – General Directorate of Revenue), through which taxpayers report their related-party transactions.
This obligation allows the tax administration to:
- Analyze in detail intra-group transactions
- Identify potential tax risks
- Strengthen audit processes
In this regard, Form 930 stands out as a key mechanism within Panama’s tax control system.
Regulatory Framework and Compliance Deadline
Pursuant to Article 762-I of the Tax Code, taxpayers subject to this requirement must file this report within six months following the fiscal year-end.
Meeting this deadline is essential, as regulations do not consider automatic extensions, requiring careful planning and effective reporting management.
Entities Subject To
The taxpayers operating with the following must file Form 930:
- Related parties abroad
- Related parties located in particular tax regimes in Panama
It includes corporate structures in free trade zones, preferential tax regimes, or other international arrangements.
Report Contents
Form 930 requires detailed information regarding intra-group transactions, including:
- Nature of the transactions (goods, services, financing, etc.)
- Amounts involved
- Identification of related parties
- General taxpayer information
All reporting is in U.S. dollars (USD) in accordance with tax administration guidelines.
Consequences of Non-compliance
Failure to comply with this obligation may result in significant consequences for taxpayers.
The regulations establish a penalty equivalent to 1% of the total amount of related-party transactions, with a maximum cap of B/. 1,000,000.
Furthermore, failing to report or reporting inaccuracies may increase risks of tax audits and closer examination of the adopted Transfer Pricing policy.
Relevant Operational Considerations
From a practical perspective, compliance with Form 930 involves considering certain operational aspects:
- The return must be filed by the deadline, with no possibility of an extension
- Corrections may require formal procedures before the DGI, which makes direct correction difficult
- The reported information and supporting documentation must be consistent
These elements reinforce the need for advanced and rigorous planning.
Relation with the Transfer Pricing Study
Indeed, Form 930 does not exempt taxpayers from the Transfer Pricing study.
While the form serves a reporting function, the study provides technical support for adherence to the Arm’s Length Principle.
Both must be aligned, as any inconsistency may result in tax adjustments by the tax administration.
The Transfer Pricing Report (Form 930) is much more than a mere formal requirement. It is a key tool within the tax compliance system, requiring taxpayers to demonstrate a high level of accuracy, consistency, and transparency when reporting their intra-group transactions.
At TPC Group, we have a specialized team in Transfer Pricing and international taxation that provides comprehensive advisory services in preparing, reviewing, and complying with obligations such as Form 930, as well as in preparing technical studies aligned with local and international regulations.
Source: DGI