Transfer pricing in Panama

Transfer pricing in Panama at a glance

Regulation Type National regulations
Are there specific transfer pricing regulations? Yes
Submission deadline 6 months after close of fiscal year
Submission deadline upon request 45 days
Annual update required Yes
Official language requirements Spanish
Potential impact of penalties 1% of the intercompany transactions


Panamas’ tax law

Rules for transfer pricing in Panama are based upon:

  • Tax Code Articles 762-A up to 762-K


In Panama the OECD Transfer Pricing Guidelines can be used as a source of interpretation for national transfer pricing regulations. However, if the OECD Guidelines interfere with the national regulations, the national regulations prevail.


Accepted methods

Accepted methods are:

  • The comparable uncontrolled price method
  • The resale price method
  • The cost plus method
  • The profit split method
  • The transactional net margin method

Priority of methods

Rules for transfer pricing in Panama do not prescribe a priority of methods. The selection of the method should be based upon the best method to reflect the arm’s length principle.

Documentation requirements

Information that should be included in the documentation:

  • Identification of the related parties with whom the taxpayers conducts intercompany transactions
  • A detailed description of the nature, characteristics and amount of all intercompany transactions of the taxpayer, including the transfer pricing method employed
  • A general description of the organizational, legal and operating structure of the group, with any relevant changes
  • The transfer pricing policy of the multinational group, if any


Rules for transfer pricing in Panama prescribe that all documentation should be submitted in Spanish.

Requirements to prepare documentation annually

A taxpayer is required to update its documentation annually and the documentation should be submitted each year within six months of the close of a fiscal year.

Submission deadline upon request by tax authorities

Upon request of the tax authorities, a taxpayer had 45 days to submit its documentation.

Advance Pricing Agreements


Rules for transfer pricing in Panama do not provide for an option to obtain an Advance Pricing Agreement.


Not applicable.


If a taxpayer fails to comply with it’s documentation requirements, a penalty up to one percent of the total amount of intercompany transactions may be imposed.