In Panama, there are no group taxation rules.
Transfer pricing obligation is extended to all the transactions carried out with foreign-related parties, in case these operations have effect in determining the tax base. There is an obligation to file an annual Transfer Pricing Informative Statement (‘Form 930’), which includes all the operations carried out with foreign-related parties during the fiscal year under analysis. This report should be filed six months after the fiscal year has ended. Failure to submit or late submission of this Form will be penalised with a fine equivalent to 1% of the total sum of operations carried out with foreign-related parties and will never exceed USD 1 million.
Law established the formal requirement for the preparation of a Transfer Pricing Study. However, the taxpayer should only present the Study in case the Panamanian Tax Authority requires it, within 45 working days, starting a day after the notification. Tax Authorities are allowed to fine those taxpayers that fail to present the Transfer Pricing Informative Statement or any required documents before the deadline; fines ranging from 1,000 Panama balboas (PAB) to PAB 5,000 will be applied the first time, from PAB 5,000 to PAB 10,000 in case of recurrence, and the closure of the establishment for 2 to 15 days in case of non-compliance.
There are currently no thin capitalisation rules in Panama.
Controlled foreign companies (CFCs)
There are no provisions regarding CFCs in Panama.