Corporate taxpayers subject to the transfer pricing rules have six months after the close of the tax year to comply with the filing requirements for filing Informe 930 (Form 930).
Thus, corporate taxpayers that engaged in transactions with related foreign entities and that had a tax year ended 31 December 2012 must file their transfer pricing reports demonstrating the arm’s length nature of these related-party transactions by 30 June 2013.
Transfer pricing documentation
Guidance issued in early January 2013 (Resolución No. 201-301 “Por la cual se adoptan los nuevos formatos para la presentación de las Declaraciones Juradas de Renta, Personas Jurídicas, según régimen general y por sectores de actividad económica”) highlights the importance of maintaining contemporaneous transfer pricing documentation.
Lines were added to Panama’s tax form used for reporting of transactions with foreign related parties abroad, and these new lines require information concerning revenue, costs, and expenses. From this, it can be assumed that the tax authorities will be prepared to conduct reviews and inspections in order to confirm whether or not the arm’s length principle has been satisfied.
Transfer pricing study
Corporate taxpayers must prepare a transfer pricing study that documents the functions, assets, and risks involved in the transactions conducted with foreign related-party entities. Taxpayers must also indicate which valuation methods were selected and which comparable entities were selected entities (among other information).
The transfer pricing study is to be kept in the taxpayer’s corporate offices and must be provided to the tax authorities when requested.
Because these provisions were effective for the tax year ended 31 December 2012, the information presented in the income statement in 2012 must also be included in the transfer pricing study.
Form 930 / transfer pricing report
Corporate taxpayers whose tax year ended 31 December 2012 must file no later than 30 June 2013 an information return (on Form 930) with the tax authorities.
Form 930 must set forth details of the related-party transactions; the total amount of each type of transaction; the valuation method selected in applying the arm’s length principle.
The information supplied on Form 930 must be consistent with the transfer pricing study prepared by the taxpayer and with the income statement for the 2013 tax year.
Failure to comply with these requirements may be subject to a penalty of 1% of the gross amount of the subject related-party transactions for the tax year.
Read a January 2013 report (Spanish) [PDF 297 KB] prepared by the KPMG member firm in Panama:
- January 2013 report (English) [PDF 132 KB]: Recorderis de las nuevas obligaciones en materia de precios de transferencia vigentes a partir del año 2012
- January 2013 report (Spanish) [PDF 297 KB]: Recorderis de las nuevas obligaciones en materia de precios de transferencia vigentes a partir del año 2012
Contact a tax professional with KPMG's Global Transfer Pricing Services.