Meet your tax obligations for related-party transactions with technical documentation, defensible analysis, and specialized support.
What Your Company Needs to Keep in Mind in Panama
Tax Authority
Transfer pricing compliance is reviewed by the General Directorate of Revenue (DGI).
Companies with transactions between related parties may be subject to the Transfer Pricing Report (Form 930), the Transfer Pricing Study, and, where applicable, the Country-by-Country Report.
Key Obligations
A lack of technical documentation may result in fines, tax adjustments, surcharges, or increased exposure to audits by the tax authority.
Non-compliance Risks
Compliance deadlines in Panama depend on the taxpayer’s fiscal year-end:
6 months after the fiscal year-end: Filing of Form 930.
The Transfer Pricing Study must be prepared in case it is requested by the DGI.
Functional analysis of functions, assets, and risks.
Benchmarking or comparability analysis, when applicable.
Identification of the related parties involved.
Financial information on the taxpayer and the transactions analyzed.
Elements that typically form part of the analysis
In Panama, transactions between related parties must be valued in accordance with the arm’s-length principle; that is, under conditions comparable to those that independent parties would have agreed upon in similar circumstances.
Transfer pricing documentation helps demonstrate the reasonableness of intercompany transactions, supports the information reported on Form 930, and provides technical evidence in the event of potential inquiries from the General Directorate of Revenue.
Compliance in Panama involves justifying related-party transactions to an increasingly active regulatory authority
Selection of the applicable transfer pricing method.
Description of the intercompany transactions carried out.
Review of contracts, invoices, and supporting documentation.
Conclusion regarding compliance with the arm’s-length principle.
Download the Transfer Pricing Compliance Roadmap for Panama
Find all the key steps, dates, and obligations your company must review to properly comply with Panamanian regulations in a single document.
Before ensuring compliance in Panama, check that you have:
Clear identification of transactions with related parties.
A review of transactions with related parties abroad or in special economic zones.
Contracts, invoices, and supporting documentation.
A functional analysis of the entities involved.
Up-to-date and segmented financial information.
Benchmarking or comparability analysis, where applicable.
Consistency between intercompany policy and the group’s actual operations.
Transfer pricing study prepared in the event it is requested by the DGI.
Leaders in Transfer Pricing Advisory Services in Latin America
Our team can assist you in reviewing, preparing, or strengthening your transfer pricing documentation in Panama, taking into account local regulations and your business group’s actual operations.
Local Documentation
Benchmarking
Review of Intercompany Policies
Support during audits or in response to regulatory requests
We assist business groups with operations in various countries across the region, combining local compliance, a regional perspective, and specialized technical support.
+1,200
Annual Studies
Why Choose Grupo Consultor EFE® for Your Transfer Pricing Compliance
Experience in documenting and analyzing intercompany transactions.
+600
clients
Support for local businesses, business groups, and companies with international operations.
Support in Panama and other Latin American countries for companies with multinational structures.
Integrated approach
Local + Regional
Technical + Strategic
Differentiated
Documentation prepared to comply with, support, and defend the transaction during audits.
At Grupo Consultor EFE®, we understand that transfer pricing compliance is not merely a tax obligation. It can also serve as a tool to strengthen decision-making, assess the efficiency of intercompany transactions, and anticipate risks in an increasingly regulated environment.
The support they provide throughout the entire process is consistent and highly responsive. Their commitment to completing each stage is evident, as is the high level of professionalism with which they approach every project. Their approach builds trust from the start, and the results clearly reflect their serious and responsible approach. The way they engage and deliver on their promises is truly exemplary.
Companies That Have Placed Their Trust in Us
Real results from business groups that demonstrate their compliance with our technical support.
Rosa Delia Silva Pineda
Flextronics
"
Working with your team has been a positive experience from start to finish. From our very first contact, they demonstrated a high level of professionalism, attention to detail, and clarity in communication. The results we achieved were fully in line with our expectations, which confirms the quality and effectiveness of your services.
Argentina Hidalgo
EMASAL Group
"
It was my first time working on transfer pricing; the support and follow-up were excellent and appropriate. At our corporate office in San Diego, we were asked to conduct a transfer pricing study; previously, our company’s accounting was handled by an external firm, and they were the ones who recommended Grupo Consultor EFE® to us.
Pablo Rafael Xep
CPS
"
Transfer pricing regulations in Panama are primarily set forth in Chapter IX of the Tax Code of the Republic of Panama, as amended by Law 33 of 2010 and modified by Law 52 of 2012. These provisions establish obligations for taxpayers who engage in transactions with related parties, particularly in transactions with related parties abroad or under certain special regimes.
The regulatory framework requires that intercompany transactions be valued in accordance with the arm’s-length principle, that supporting documentation be retained, and that the relevant information be disclosed when the taxpayer falls under the applicable provisions.
Transfer Pricing Laws in Panama
Panama’s transfer pricing regime was formalized in Chapter IX of the Tax Code. Initially, the obligations applied to transactions with related parties located in countries with which Panama had double taxation treaties; subsequently, through Law 52 of 2012, the scope was expanded to include transactions with related parties abroad, regardless of whether a treaty exists.
Article 762-A of the Tax Code establishes that transactions with related parties must be valued in accordance with the arm’s-length principle. In turn, Article 762-D provides for the application of the OECD Transfer Pricing Guidelines as a reference for interpreting the applicable provisions.
Applicable Legislation in Panama
Definition of a Related Party in Panama
In Panama, two or more persons are considered related when one of them participates directly or indirectly in the management, control, or capital of the other, or when a person or group of persons participates directly or indirectly in the management, control, or capital of such persons.
The principal office, other permanent establishments of the same entity, and related persons as defined by applicable regulations are also considered related parties of a permanent establishment.
The correct identification of related parties is essential for determining whether there is an obligation to analyze, document, and file the Transfer Pricing Report.
Transactions Under Special Regimes
Panama’s transfer pricing regime may apply to transactions conducted with companies operating under special regimes or in economic benefit zones, including the Colón Free Zone, the Panama Pacifico Special Economic Area, Multinational Corporate Headquarters, City of Knowledge, the Petroleum Free Zone, and other current or future economic zones.
These transactions must be reviewed with particular care, as they may be subject to documentation, analysis, and disclosure requirements even when specific tax treatments apply.
Enforcement Practices of the Tax Authority in Panama
The General Revenue Directorate (DGI) has stepped up its audit efforts regarding transfer pricing, reviewing studies, requesting additional supporting documentation, and imposing fines for failure to file Form 930.
Situations that may trigger requests or notifications from the DGI include late filing of Form 930, inconsistencies between the form and the Income Tax Return, methods inconsistent with the nature of the reported transactions, and transactions involving low- or no-tax jurisdictions.
Informative Return in Panama
Taxpayers who engage in transactions with related parties must file the Transfer Pricing Report, known as Form 930, through the system provided by the General Revenue Directorate.
This report allows for the disclosure of intercompany transactions, adjustments to indicators, financial information, intangible asset transactions, selected comparable companies, and relevant data on the taxpayer and the business group.
Reference Date:
6 months after the fiscal year-end: Filing of Form 930.
Supporting Documentation
Taxpayers subject to the transfer pricing regime must have a Transfer Pricing Study that demonstrates that their transactions were determined in accordance with the arm’s-length principle.
The study must include information on the taxpayer, intercompany transactions, functional analysis, risks assumed, assets used, financial information, the selected method, comparables, and technical conclusions that support the reasonableness of the transactions.
Panamanian regulations require taxpayers to maintain documentation related to the multinational enterprise group to which they belong. This information is consistent with the content referred to as the Master File in the OECD Guidelines.
The Master File may include information on organizational structure, group activities, transfer pricing policy, relevant transactions between group entities, intangibles, financial activities, and overall financial position.
Panama has implemented the requirement to file the Country-by-Country Report for parent companies of multinational enterprise groups resident in Panama, when the group exceeds the consolidated revenue threshold established by applicable regulations.
The Country-by-Country Report must be filed through the corresponding portal within twelve months following the end of the fiscal year being reported.
Reference Date:
12 months following the multinational group’s fiscal year-end: Filing of the Country-by-Country Report, where applicable.
Documentation and information related to the calculation of transfer prices must be retained for the period specified by Panamanian regulations. Generally speaking, the statute of limitations is five years from the date of filing the tax return.
The Transfer Pricing Study must be prepared for submission to the General Directorate of Revenue upon written request.
Deadline for Submission Upon Request:
45 business days to submit the Transfer Pricing Study if requested by the DGI.
Documentation submitted to the tax authority must be prepared in Spanish.
Panamanian law does not provide for special treatment for small and medium-sized enterprises with regard to transfer pricing. Therefore, obligations must be assessed based on the type of transaction, the relationship between the parties, the jurisdiction involved, and the provisions set forth in the applicable regulations.
Although the Tax Code does not establish a specific deadline for preparing the Transfer Pricing Study, it must be completed before Form 930 is filed, as the reported information must be supported by technical analysis and sufficient documentation.
In Panama, the general statute of limitations is five years from the date the corresponding tax return is filed.
Panamanian regulations provide for various methods to assess whether transactions between related parties are conducted in accordance with the arm’s-length principle.
Accepted Methods:
The selection of the method must take into account the nature of the transaction, the availability of comparable information, the functions performed, the assets used, and the risks assumed by the parties involved.
Failure to comply with transfer pricing reporting and documentation obligations may result in fines, tax adjustments, surcharges, interest, and increased exposure to audits by the tax authorities.
When false or incomplete information is provided, the taxpayer may be subject to additional penalties under the Tax Code. If a tax adjustment to the prices is confirmed, financial penalties may be imposed on the underpaid tax, without prejudice to other measures provided for in the applicable regulations.
Panamanian regulations set forth comparability criteria that must be considered when selecting comparable transactions for a transfer pricing analysis.
The analysis may consider specific characteristics of the transactions, functions performed, assets used, risks assumed, contractual terms, market characteristics, and other relevant economic factors. When internal comparables exist that meet the comparability requirements, they take precedence over external comparables.
Panama is part of the Inclusive Framework for the implementation of the recommendations of the BEPS project promoted by the OECD and the G20. This framework seeks to strengthen tax transparency, combat harmful tax practices, and align tax systems with internationally accepted principles.
The adoption of the Country-by-Country Report is part of Panama’s efforts to align its regulations with international standards of transparency and documentation regarding transfer pricing.
Failure to comply with transfer pricing disclosure and documentation obligations may result in fines, tax adjustments, surcharges, and increased exposure to audits by tax authorities.
Failure to file Form 930 may result in a fine equivalent to 1% of the total amount of related-party transactions reported on the Income Tax Return, with a maximum limit of one million balboas. In addition, a lack of supporting documentation or the existence of transactions outside market ranges may result in transfer pricing adjustments.
Check your company’s compliance
in Panama
Schedule a consultation with our team to find out if your related-party transactions have the necessary technical support to ensure full compliance in Panama.
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