In recent years, the DGI has been requesting "Information and Documentation relating to the Business Group" or "Master File" from taxpayers subject to the Transfer Pricing Regime.
In recent years, the Directorate General of Revenue (DGI) has been requesting "the Information and Documentation related to the Business Group" or "Master File" from taxpayers subject to the Transfer Pricing Regime. This obligation is stipulated in article 762-K of the Tax Code of the Republic of Panama and in article 11 of Decree 390 of 24 October 2016.
The "Master File" contains high-level information about the group's global transactions and its transfer pricing policies. This documentation aims to provide the Tax Administrations with comprehensive information on the profit generating aspects and general description of the value chain, among other aspects, of the group's economic activities on a global scale. At all times, it must be available to the tax administrations in accordance with the basic tax legislation of each country.
It is worth noting that, in Panama, through Article 762-L of the Tax Code, the Transfer Pricing regime also covers local transactions from 2019, provided that one of the parties is located in Free Zones, Free Trade Zones, Special Economic Areas and Special Regimes. This means that Article 762-K would also be applicable to these transactions, even in cases where a multinational group is not involved, such as consortia entering into transactions with related parties and/or local business groups that have operations in these regimes. In these cases, the type of relationship and the scope of documentation for compliance with the requirements of the rule and its regulations will have to be clearly established.
The fine for the omission or late filing of the "Master File" is established in Article 756 of the Tax Code and ranges from $1,000 to $10,000 and up to a possible temporary closure of the establishment. It should be noted that the "Master File" may be requested immediately by the Tax Administration, as the Tax Code does not stipulate a filing deadline like the deadlines established for the submission of the Transfer Pricing Report and the Transfer Pricing Study. In recent requests for information by the Directorate General of Revenue, it is noted that such documentation should have been kept at the time of filing the Transfer Pricing Report F-930.
Complete note at: https://www.martesfinanciero.com/voz-calificada/la-importancia-del-archivo-maestro-para-los-grupos-empresariales-locales-y-multinacionales