Thread: Tax returns required for offshore corporations?

A Panama company that does business in Panama has to submit an annual tax return to the tax authorities. A Panama offshore company that has no operations, presence or bank account in Panama doesn't have to do so... as far as the government is concerned, all it needs to do is pay the Tasa Unica to remain in good standing.

Now, what about an offshore company that does have an office and bank account in Panama, but doesn't do any business in Panama? ("no business with Panamanians")

Does such a company have to file tax returns?

I asked several professionals and got different responses. An accountant said that yes, it's required and that he would be glad to do the job. A lawyer said that it's not required at all and would be a waste of time and money... banks do not demand tax returns (unless you want to get a loan or are opening a new account) and the tax authorities don't care unless the company really does business in Panama. Another lawyer said that it is required and that even offshore corporations have to pay taxes on their earnings. (I never heard such a thing before so I got a bit confused.)

From a logical point of view I asked myself this question: if there are no taxes to pay, what would be the point of filing a tax return?

What do the experts here at Panama Forum think and/or know about this? I'd be interested in looking at this both from a legal point of view and from a practical point of view.

You should not under any circumstances file a tax return for your situation. They might require you to file one with a zero on it in the future.

Best wishes, Ed
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Thank you, Ed!