Panama, November 25, 2021. If taxpayer’s resident in Panama have carried out transactions with related parties outside of Panama this tax year, it will be important to review before the end of December whether the related payments are within the ranges required by the tax regulations. Even with local related parties in certain cases the same “fair market price” rule applies.
We do not recommend closing the year without being clear about this situation which can be reviewed and remedied in time. In Panama related parties are those that meet the following profile:
“…Two or more persons shall be considered related parties 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.
Likewise, the head office or other permanent establishments of a permanent establishment are considered to be related parties of the permanent establishment”. (Article 762-C of the Tax Code)
For more information on these topics please contact: [email protected].