1. When must it be filed?
The Tax Code of the Republic of Panama does not establish a date for drafting the transfer pricing study in Panama. Therefore, it must be previously prepared for the purposes of the information-related party statement, so the taxpayer should have the study prior to the filing thereof.
2. Affected parties and Documentation to be filed
The Panamanian legislation states that those taxpayers who carry out transactions with related parties that are tax residents of other jurisdictions, provided that such transactions have effects as income, costs, or deductions in the determination of the taxable income, for income tax purposes, must file:
- The Information Transfer Pricing Statement (Form 930)
- The Technical Transfer Pricing Study (TTPS).
On the other hand, the Country-by-Country or Cbc report will only apply to Parent Company Taxpayers that have consolidated income over € 750,000,000, filing within the 12 months following the closing date of the corresponding tax period.
3. Time for Conservation of the Transfer Pricing Information
The transfer pricing study or documentation must be kept by the taxpayer and made available to the Tax Administration when requested through a written communication for reviewing or auditing purposes. If requested, the taxpayer will have a term of 45 business days to file it.
4. Reasons to have the Information Prepared
If the information requested is not filed, the Administration will impose a fine of 1% of the total gross amount of the transactions with related parties, up to a maximum of $1,000,000.
Additionally, due to the lack of uniform legislation, a “Serious fine for failure to file document” will be added to the failure to file, which may range between $1,000 and $5,000 the first year and between $5,000 and $10,000 in case of recidivism.
Source: Dirección General de Ingresos