Countries › Panama › Guide › 6. Taxes › Transfer pricing in Panama: arm's length rule, Form 930 within six months, the study on 45 days' notice and the 1 percent penalty

Transfer pricing in Panama: arm's length rule, Form 930 within six months, the study on 45 days' notice and the 1 percent penalty

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Last verified: 2026-10-29 · Status: Stable

Transactions with related parties resident abroad that affect Panamanian taxable income must be priced at arm's length, using the OECD guidelines as technical reference. Taxpayers file an annual related party report (Form 930) within six months after year end and must already hold a transfer pricing study when they file, delivering it within 45 days of a DGI request. Failing to file the report costs 1 percent of the gross related party transactions, capped at B/.1,000,000, and free zone and special regime companies are covered too.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates freely as legal tender; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Related party report (Form 930) deadline	6 months after year end monthsCódigo Fiscal art. 762-I, as of 2026-10-29 · in force
Fine for not filing the related party report, share of related party transactions	1 %Código Fiscal art. 762-I, as of 2026-10-29 · in force
Maximum fine for not filing the related party report	1000000 PABCódigo Fiscal art. 762-I, as of 2026-10-29 · in force
Days to deliver the transfer pricing study after a DGI request	45 daysCódigo Fiscal art. 762-J, as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos), as of 2026-10-29 · in force

The rule

1. Transactions between related parties must be valued under the arm's length principle, and the resulting value reflected in the returns (art. 762-A); the DGI may adjust prices that lead to less tax or deferral (art. 762-B). Parties are related when one participates directly or indirectly in the management, control or capital of the other, or the same persons participate in both, including a permanent establishment and its head office (art. 762-C).Código Fiscal art. 762-A to 762-C added by Ley 33 de 2010 art. 1, art. 762-A to 762-C, 2010-06-30 official text · verified 2026-10-29

2. The regime covers any transaction with related parties that are tax residents of other jurisdictions and that affects income, costs or deductions for income tax in the period; the OECD Transfer Pricing Guidelines approved in 2010, or those replacing them, apply as technical reference where consistent with the Code (art. 762-D).Código Fiscal art. 762-D as worded by Ley 52 de 2012 art. 7, art. 762-D, 2012-08-28 official text · verified 2026-10-29

3. Taxpayers file an annual report of related party transactions within six months after the fiscal year closes. Failure to file is fined at 1 percent of the gross amount of related party transactions, whether income, costs or deductions, up to B/.1,000,000.
Example: B/.20,000,000 of related party purchases and sales and no Form 930: fine of B/.200,000. / US$20,000,000 of transactions, US$200,000 fine; the cap is US$1,000,000.Código Fiscal art. 762-I as worded by Ley 114 de 2013 art. 2, art. 762-I, 2013-12-10 official text · verified 2026-10-29

4. Those obliged to file the report must hold a transfer pricing study when they file it, and deliver it within 45 days of notification of a DGI request. The study covers at least the taxpayer and related parties, group information, the nature and amount of transactions and methods used, a comparability analysis and the reasons for the method and the range used (art. 762-J); group information includes the organizational, legal and operating structure and the group's transfer pricing policy (art. 762-K).
Cost to do it: No government fee; the cost is the study, usually prepared by an external adviser.Código Fiscal art. 762-J and 762-K as worded by Ley 52 de 2012 art. 9 and art. 10, art. 762-J and 762-K, 2012-08-28 official text · verified 2026-10-29

5. Persons dealing with related parties in the Colón Free Zone, oil free zones, Panamá Pacífico, multinational headquarters (SEM), Ciudad del Saber or other free zones and special economic areas, and those entities' own transactions with related parties in Panama, abroad or in other special zones, are subject to transfer pricing even if exempt or taxed at a reduced rate, for transactions from fiscal year 2019.Código Fiscal art. 762-L restored by Ley 69 de 2018 art. 9, art. 762-L, 2018-12-26 official text · verified 2026-10-29 · changed: Ley 69 de 2018 restored art. 762-L and extended transfer pricing to domestic transactions with special regime companies from fiscal year 2019.

6. Audits involving transfer pricing or international taxation may be extended by up to six additional months beyond the six month general limit (Código de Procedimiento Tributario art. 205), and the evidence period on appeal is 10 to 45 business days instead of 10 to 30 (art. 307).Ley 76 de 2019, Código de Procedimiento Tributario, art. 205 and art. 307, 2019-02-13 official text · verified 2026-10-29

Obligation	When	Consequence	Rule
Price related party transactions at arm's length	Every transaction	DGI adjustment	Art. 762-A, 762-B
Annual related party report	Within 6 months of year end	1 percent of transactions, max B/.1,000,000	Art. 762-I
Transfer pricing study	Ready at filing; delivered within 45 days of request	Audit exposure	Art. 762-J
Group information	Part of the study	Audit exposure	Art. 762-K
Special zone companies	From fiscal year 2019	Same regime	Art. 762-L

Panamanian transfer pricing obligations and deadlines (Código Fiscal art. 762-A to 762-L).

Worked example

A Panamanian distributor buys B/.15,000,000 of goods from its foreign parent and pays B/.5,000,000 of services and royalties to group companies in 2025, a calendar year.
It files Form 930 by 30 June 2026 and has the 2025 study ready on that date. If it misses the report, the fine is 1 percent of B/.20,000,000, B/.200,000 (US$200,000).
If the DGI requests the study, it has 45 days from notification to deliver it.

Step by step

Map all related parties abroad and in Panamanian special zones, and every transaction with them.
Commission or update the transfer pricing study before the report deadline.
File the related party report within six months after year end.
Keep group documentation (structure, policy) ready for a 45 day request.
Align intercompany agreements, invoices and the income tax return figures.

Common traps

The penalty base is gross transactions, not the tax at stake, so it can be large even for low margin flows.
Exempt or reduced rate companies in free zones, SEM or Panamá Pacífico are not outside the regime.
The study must exist when the report is filed, not only when the DGI asks for it.
Payments to related parties abroad also carry withholding; transfer pricing does not replace it.

Sources

Related: Panama country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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