Tax Controls in Panama 2025

Bill No. 624 introduces a stricter obligation for legal entities in Panama to keep updated and available accounting records. This change aims to align with international standards and support the prevention of money laundering. Key aspects include:

• Companies must maintain financial information that reflects their transactions, including income, expenses, and annual balances.
• Accounting records must be kept for a minimum period of five years.
• Non-compliance can result in severe financial penalties and even the suspension of the company.

This measure is not only focused on oversight but also on positioning Panama at the forefront of global tax transparency.

One of the key changes in Bill No. 624 is the additional obligation imposed on Resident Agents. These responsibilities reinforce the role of agents as key intermediaries in the framework of legal and tax transparency. Main obligations include:

• Keeping share certificates and detailed shareholder records updated for each company they represent.
• Filing an annual report through a Sworn Annual Declaration to the General Directorate of Revenue (DGI), detailing all companies registered under their representation.
• Managing the transfer of records in case of a change in Resident Agent.

Additionally, failure to comply with these responsibilities may result in penalties for both the Agent and the companies. This underscores the importance of selecting a reliable and committed Resident Agent.

Another crucial aspect of these reforms is the implementation of stricter due diligence procedures. Both financial entities (such as banks) and non-financial entities (lawyers, accountants, etc.) must conduct more thorough evaluations to identify potential risks of money laundering. These measures include:

• Identity verification for ultimate beneficial owners of companies and clients.
• Ongoing monitoring of suspicious or unusual transactions.
• Reporting to competent authorities if irregularities are detected.

The ultimate goal of these provisions is to close regulatory gaps and strengthen the country’s position in the eyes of international organizations and regulations such as those of the OECD.

The Ultimate Beneficial Owners (UBO) Registry is a key measure to enhance transparency in Panama. This system grants authorities immediate access to information about the real owners of companies, aiming to prevent money laundering and terrorist financing. Its benefits include:

• Increased trust from investors and financial institutions.
• Reduced risk of international sanctions and restrictions.
• Compliance with global tax transparency standards.

Failure to comply with this regulation may result in severe penalties, including fines and the forced dissolution of the company.