Panama accounting requirements

Annual filings now legally required

In Panama, accounting requirements and legal obligations for companies, including holding companies, are governed by the country’s commercial and tax laws. Here’s an overview of the key requirements:

Accounting requirements

Bookkeeping

All companies must maintain accurate financial records. This includes keeping books that detail income, expenses, assets, and liabilities.

Financial Statements

Companies are required to prepare annual financial statements, which must be audited if they meet certain criteria (e.g., size or type of business).

Accounting Standards

Financial statements should be prepared in accordance with International Financial Reporting Standards (IFRS) or local accounting standards.

Annual Filings

Annual Return

Companies must file an annual return (declaration) with the Public Registry. This includes updated information about the company’s directors, shareholders, and registered address.

Tax Returns

All companies, including holding companies, are required to file an annual tax return with the Directorate General of Revenue (DGI). The tax return must include financial statements.

Tax Payment

Companies are subject to a flat annual tax on their net income, and specific tax obligations must be met, such as the payment of the annual tax (which varies depending on the type of company).

Holding companies legal obligations

It is worth mentioning that there are a number of situations that the authorities of the Republic of Panama must regulate, in order to make them very clear for all the actors. However, while we wait for this to happen, we urge all our clients, if they have not already done so, to start keeping accounts of all their transactions and those clients whose entities are exclusively dedicated to being asset holders, to carry out a evaluation through an accountant and that the latter issues a certification detailing the information required by law.

If you do not already have an accountant, we will be happy to refer your case to an accountant in Panama to prepare accounting records. We ask that you send us the accounting records and supporting documents or a copy of them, or you can contact us to request access to a special form to send us the information electronically.

Any consult or doubt, we are at your service.