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Defence in audits and assessments
Handling information requests, responding to additional assessments issued by the DGI, and building the documentary support that sustains the taxpayer's position.
A tax audit is rarely won by arguing over figures. It is won with a well-built file, the right rule invoked, and the appeal filed on time before the right forum. We act for taxpayers and companies before the Panamanian tax authorities, at both the administrative and judicial stages.
From prevention — structuring properly before there is any dispute — through to defence once the dispute exists.
Handling information requests, responding to additional assessments issued by the DGI, and building the documentary support that sustains the taxpayer's position.
Reconsideration before the Directorate General of Revenue and appeal before the Administrative Tax Court. Once the administrative route is exhausted, administrative litigation before the Third Chamber of the Supreme Court.
Analysis of whether a transaction generates Panamanian-source income. This is the central question for companies with cross-border activity, and the one that produces the most assessments.
Review of related-party transactions, support with the annual report filing, and defence of the supporting study when the administration requests it.
Designing the corporate and contractual structure before you operate — within the law, and with the documentation that will sustain it if it is ever reviewed.
Analysis of whether the liability is still enforceable, refund and tax credit claims, and negotiation of payment facilities with the administration.
Formal obligations of Panamanian companies with owners abroad: annual franchise tax, accounting records, resident agent and filings where applicable.
Determining the applicable treatment, withholding obligations, and defence against municipal tax and levy assessments.
What distinguishes the Panamanian regime is the territorial principle: tax applies to income produced within the national territory. Both legitimate planning and most disputes are built on that principle.
The tax authority, attached to the Ministry of Economy and Finance. It audits, assesses and collects. It is the first instance of any dispute.
Autonomous and independent from the DGI. Decides appeals against its rulings at the second administrative instance.
The final stop. Reviews the legality of what was decided administratively, once that route has been exhausted.
Sets fiscal policy and issues the regulations that develop the Tax Code.
Where the company's standing is recorded. Failure to meet formal obligations can end in suspension and block any transaction.
Local taxes and levies with their own procedure, routinely forgotten until the demand arrives.
Deadlines to challenge in tax matters run in business days from notification of the decision. Answering a request without analysing it first can entrench the administration's position and narrow the room for later defence. Review before you reply.
Panamanian income tax applies to Panamanian-source income, that is, income produced by activities carried out within the national territory. Income earned abroad falls outside the charge in principle.
In practice the argument is almost never about the principle itself, but about where a particular transaction is deemed to have taken place. That is where most assessments are decided.
An additional assessment is tax the administration considers still owed. It can be challenged, but the deadlines are short and run in business days.
The first step is to review the reasoning of the decision and the supporting documentation before replying. An improvised answer can entrench the administration's position and leave the next stage without arguments.
The Administrative Tax Court is autonomous and independent from the DGI, and decides appeals against its rulings at the second administrative instance.
Once that route is exhausted, the dispute can be taken to the Third Chamber of the Supreme Court through administrative litigation.
The regime applies to taxpayers carrying out transactions with related parties that affect their taxable income in Panama.
The obligation includes filing the corresponding report within the deadline and keeping the study that supports that the transactions were agreed at arm's length. Having the report is not enough: you must be able to defend it if it is reviewed.
Even where the company generates no Panamanian-source income, formal obligations remain: the annual franchise tax, a resident agent, accounting records, and filings where applicable.
Failure to comply triggers fines and can lead to the company being suspended at the Public Registry, which blocks any transaction until it is put right.
Tell us about the situation in general terms and we will tell you what room there is and how long you have. The initial assessment commits you to nothing.
The content of this page is general information about Panamanian law. It does not constitute legal advice and does not replace analysis of a specific case. Submitting the form does not by itself create an attorney-client relationship, which is formed solely by express agreement between the parties.