An executive decree issued by the Ministry of Economy and Finance (Ministerio de Economía y Finanzas) establishes the regulatory framework for country-by-country (CbC) reporting in Panama.
Under the rules provided by decree (No. 46 (27 May 2019)), the annual obligation to submit a CbC report will be the responsibility of the ultimate parent entity of a multinational group having consolidated revenue greater than €750 million or its equivalent in Panamanian balboas in the previous financial year and also residing for fiscal purposes in Panama.
These “reporting entities” must comply with reporting requirements for FY 2018 and within 12 months after the fiscal year-end, using an "XML schema" format and pursuant to guidelines to be established by the Panamanian tax administration (Dirección General de Ingresos—DGI).
In addition, the decree establishes that Panamanian entities belonging to a foreign multinational group (that is, when the ultimate parent entity is located outside Panama) must submit a notification to the DGI, indicating the identity and tax residence of the party that will be the reporting entity. Specifics about this notification (such as format, deadline, and conditions) are at present not known. These procedural requirements for the notification are to be established by the DGI.
The decree provides that the DGI may not make use of information contained in a CbC report for purposes of making transfer pricing adjustments. The DGI is authorized to use the CbC report information only to conduct risk assessments of transfer pricing, economic, and statistical analysis.
Read a June 2019 report (Spanish) prepared by the KPMG member firm in Panama
For more information, contact a professional with KPMG’s Global Transfer Pricing Services practice in Panama:
Alonso Campa | +507 208 0758 | firstname.lastname@example.org
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