PANAMA Law and Practice Contributed by: Rafael Rivera, Javier José Vallarino, Juan Vallarino, Karen Y. Tejeira and Carolina Lino, BDO Legal Panama
Co-operation and development (OECD) Transfer Pric - ing Guidelines for Multinational Enterprises and Tax Administrations. An annual statement of transactions (Form 930) with related parties must be submitted to the tax authori - ties within six months of the end of the fiscal year. In addition, taxpayers must prepare a transfer pricing study and make it available to the tax authorities. If the Form 930 is not filed, a 1% fine capped at USD1 million applies to the gross amount of the transactions with related parties. 5.7 Anti-Evasion Rules According to the Tax Procedure Code, the Panamani - an Tax Authorities may disregard the adoption of legal forms when premeditated acts are carried out with the sole purpose of avoiding the payment of taxes or obtaining some type of tax advantage, thereby violat - ing the obligation to contribute with sufficient will and knowledge. Moreover, Panamanian legislation defines tax avoid - ance as the performance of acts or transactions for a purpose other than that established by law, and with no justification other than to reduce the tax burden of the person performing them, including to obtain undue tax credits, or, in general, some tax benefit in violation of the tax law. 5.8 Tariffs Currently, Panama uses the Harmonized System (HS) to classify goods, and a large portion of products have low or zero tariffs. Panama participates in free trade agreements, such as the Trade Promotion Agreement with the USA and the Agreement with the EU, allowing for preferential tariffs. In Panama, the highest tariffs apply to agricultural products and some industrial goods, and the tariffs applicable can range from 15% to 30%.
notified in cases that qualify as an economic con - centration. To be considered as such, the merger or acquisition must occur between suppliers or potential suppliers, customers or potential customers, or other economic agents that are actual or potential competi - tors. When assessing the impact, consideration may be given to whether the merger or acquisition promotes or includes, as part of its objectives, the increase in production or distribution of goods and/or services in the local or global market, stimulates technical or economic progress, or fosters the competitive devel - opment of an industry or sector. In such cases, the benefits must be verifiable. Economic concentrations whose effects are or may be detrimental to free economic competition in the country are prohibited. However, the notification system in Panama is vol - untary and not mandatory to complete a transaction. Nevertheless, if an economic concentration has not been the subject of prior verification, the Authority might initiate an investigation within three years fol - lowing the closing date of the transaction. 6.2 Merger Control Procedure In Panama, there is no specific statutory deadline for the notification of mergers and acquisitions under the framework of competition and consumer protection law. The economic agent may submit a notification of the economic concentration to the authority prior to its entry into effect ‒ that is, before the merger or acquisi - tion is completed. The interested party must submit the notification in writing, accompanied by a copy of the relevant legal instrument, whether it concerns a merger or an acqui - sition. Within 20 days of receiving the notification, the Con - sumer Protection and Competition Defense Authority may request additional documentation. The Authority then has 70 days from the date of receipt of the noti - fication ‒ or from the date on which additional infor -
6. Competition Law 6.1 Merger Control Notification
Under the Consumer Protection and Competition Defense Law, mergers and acquisitions must be
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