Experts analyze transfer pricing and expectations for Panama in 2025

Panama is moving forward in the development of a strategy to ensure compliance with tax obligations, aligned with international guidelines. This implies that companies will have to adapt to the new challenges and tax trends present in the global transfer pricing environment.

In the framework of the webinar entitled “Transfer Pricing: Novelties and Obligations for 2025”, organized by Capital Financiero and the firm Galíndez, Medrano & Asociados, several topics were discussed, such as the current legislation in Panama, relevant cases and the new transfer pricing requirements that companies must comply with next year.

José Galíndez, transfer pricing consultant and partner at Galíndez, Medrano & Asociados, spoke about the changes in the transfer pricing regime implemented in 2019, with emphasis on cross-border operations and their implications for special economic zones in Panama.

Dr. Galindez emphasized that multinationals must report their operations, particularly those carried out in free zones such as the Colon Free Zone and Panama Pacifico, as well as those involving international transactions. He specified that the taxpayers bound by this regulation must file the “Transfer Pricing Report”, known as “Form 930”, within the six months following the closing of their fiscal period before the General Directorate of Revenues of the Ministry of Economy and Finance (MEF).

He highlighted that, despite the income tax exemption in certain cases, companies are still required to comply with the transfer pricing rules if they carry out transactions with related parties.

One of the key points he mentioned was the importance of having a transfer pricing study and adequate documentation to justify transactions, as failure to do so could result in penalties of up to one million dollars imposed by the tax administration.

For her part, Frida Medrano, partner and consultant at Galíndez, Medrano & Asociados, discussed the lessons learned from court rulings and the practice of transfer pricing in Panama, as well as the attitude of the tax administration towards taxpayers. She highlighted a relevant case in which a recent ruling by the Administrative Tax Court affected a fuel distribution company in Panama, which faced a tax adjustment of US$39 million, with US$14 million to be paid in taxes, as a result of the methodology used to determine transfer prices.

Wanda Montero, international consultant for the World Bank, highlighted global advances in transfer pricing, especially in the context of the digitalization of the economy. She stated that Panama has not yet adopted legislation related to the Organization for Economic Cooperation and Development (OECD) Monto B, which proposes a simplified regime focused on marketing and distribution activities.

The event was an opportunity for experts to share valuable information on how companies and their clients should maintain their documentation and control plans to face the new regulatory era in transfer pricing.

Original Article

Experts analyze transfer pricing and expectations for Panama in 2025