Recommendations for the filing of the TP Report

This June 30, taxpayers with a regular period that carried out transactions with related parties during the 2021 tax period must file...

The deadline for filing the Transfer Pricing Report in Panama is approaching. This June 30, taxpayers with a regular period that carried out transactions with related parties during the 2021 tax period must file Form 930 with the DGI (Dirección General de Ingresos – General Revenue Directorate).  

In this sense, multinational and local companies should follow these recommendations to avoid fines. Let us remember that the omission or late filing of such a report is punishable with 1% of the total gross amount of the related party transactions, which can reach a fine of $1,000,000.00. 

1. Avoiding rectifications

The DGI has been requesting taxpayers to submit rectifications of the Income Tax Return due to inconsistencies. Therefore, the amounts of income, costs, and expenses with related parties reported in the Sworn Income Tax Return must match the amounts declared in the PT Report. 

2. New Boxes in the Declarations

New boxes have been incorporated in the Affidavits of Income in which operations with local related parties must be reported, provided that one of them is located in Free Zones, Free Trade Zones, Special Economic Areas, and Special Regimes. 

3. Why is it important to know the data in the report?

It is important to know the data contained in the report to ensure its correct presentation and avoid tax risks. On the one hand, the taxpayer’s profit indicators before and after adjustments make it possible for the tax authorities to know the real differences in the market and the amount of the adjustments to see if they seem reasonable.   

On the other hand, the Administration can know the quality of the comparables presented and collect the average market margins of various transactions and economic sectors thanks to the information contained in the annex of the comparables. 

4. Attention to the questions in the TP Report

Taxpayers should pay attention to the questions regarding the reporting party in the Transfer Pricing Report, as these questions make it possible to detect certain intra-group tax risks or abnormal situations.   

Likewise, they should be attentive to those questions regarding the corporate group in cases where a related party is in a transfer pricing dispute or the taxpayer is part of an entity subject to the Country-by-Country Report.

5. Keeping data updated

Taxpayers must keep their data updated regarding the Legal Representative since he/she could be used for notifications of information requests by the Tax Administration. 

Source: Martes Financiero 18/05/22

Noticias Relacionadas