PANAMA

The Ministry of Commerce and Industries of Panama published Decree 241 in the Official Gazette, modifying current operating rules followed by branches of Multinational Companies in the country. The regulations modify Decree 28 of 2009, requiring subsidiaries to submit an annual affidavit containing more detail on their activities, including a statement of their finances and investments. The regulations will take effect as of tomorrow.

Based on these regulations, each multinational company wishing to operate with a subsidiary in Panama must send detailed information on their in-country activities to the Technical Secretariat of the Multinational Company Headquarters Licensing Commission. They will also need to submit copies of audited financial statements and medium-term investment plans. The idea is to regulate Law 41 of 2007 on the creation of subsidiaries of multinational companies in Panama.

The Executive branch explained that following the inclusive framework on the OECD’s action plan to tackle Base Erosion and Profit Shifting (BEPS), the new regulation seeks to prevent harmful tax practices in the country.