The Tax Managers of the Multinational and/or Corporate Groups are working on the submission of the "Transfer Pricing Report" for the period 2021 in order to comply with this tax obligation and avoid the high fines provided for in the Tax Code of the Republic of Panama.
It is important to note that the Transfer Pricing Report is the basic declaration to be submitted to the Directorate General of Taxes by taxpayers who have entered into transactions between related parties.
In the case of Panama, any taxpayer that carries out transactions with related parties abroad and/or transactions with local related entities when at least one is located in the Free Zones, Free Trade Zones, Special Economic Areas and Special Regimes in Panama is obliged to file this report, whose due date would be next June 30 for taxpayers with regular periods.
The omission and/or late filing of the Transfer Pricing Report is subject to a penalty of 1% of the total amount of the transactions with related parties, with a ceiling of up to $1,000,000.00, pursuant to the provisions of Article 762-I of the Tax Code.
It should also be noted that the Administrative Tax Court of the Republic of Panama has been confirming the resolutions imposing fines for failure to file this Report, known as Form 930.