Transfer Pricing in Panama
Panama City, March 10, 2023
In Panama, the transfer price is a complex and important issue related to taxation. The transfer pricing boxes on the income statement are used to detail the information to the related company of these transactions. The income statement includes several boxes related to the transfer price. It is important to answer accurately and completely, as these answers will be used to determine the amount of tax that must be paid.
In Panama, transfer pricing must comply with the arm’s length principle, which establishes that transactions between related entities must be carried out on the same terms as if they were made between unrelated entities. If a related entity prices significantly below market, this may be construed as an attempt to reduce tax and tax authorities may impose additional taxes.
For more information, contact us at rhurtado@tpconsulting.com or by phone (507) 203-6771 | (507) 203-6770 | (507) 221-8664.
