Tax audits by Panama’s General Directorate of Revenue (DGI) can be a stressful process for any business. However, with the right legal guidance and strategic preparation, it is possible to face an audit with confidence, minimize risks, and in many cases, achieve favorable outcomes.
At LAC Legal, we are expert tax attorneys and advisors with extensive experience representing clients before the DGI and providing legal defense during tax audits and investigations.
Why Might the DGI Audit Your Company?
There are various reasons why the DGI may initiate an audit, including:
- Discrepancies between your income tax, VAT (ITBMS), and other filing
- Missing or late tax returns
- Reports or alerts regarding suspicious transactions
- Random inspection processes
Important: Receiving a tax audit does not necessarily mean you’ve made a mistake—but it does mean you must act diligently and with legal support.
Key Steps When You Receive a Tax Audit Notification
- Do not ignore the notification. Review and respond promptly. Ignoring it may lead to automatic penalties or more aggressive collection actions.
- Consult your tax attorney immediately A common mistake is responding to audits with only the accountant’s help. Legal counsel is essential to interpret the law, craft a defense strategy, and protect your rights.
- Review your accounting and legal documentation. Gather:
- Tax returns for recent years
- Contracts, invoices, and proof of income and expenses
- Corporate documents and bank records
- Assess risks before responding. Don’t hand over all documentation without review. Your attorney must identify potential inconsistencies and prepare defense arguments if needed.
- Respond strategically and in writing. Avoid improvised verbal responses. All communications should be documented and issued through your legal counsel.
- Document all communication with the DGI. Every request, submission of information, and meeting should be backed by written records. This protects your legal standing in the event of an appeal.
What Can Happen After the Audit?
- Case closed with no findings: If everything is in order, the file is closed with no further action.
- Additional tax assessment: If discrepancies are found, the DGI may issue a payment demand, including interest and surcharges.
- Fines or penalties: In more serious cases, penalties for non-compliance or tax evasion may be applied.
- Contentious proceedings: If you disagree with the outcome, you may file for reconsideration or appeal before the Tax Administrative Court—where our legal defense becomes essential.
Why Choose LAC Legal?
- We represent companies of all sizes in complex tax audits
- We have deep expertise in Panamanian tax law and administrative procedures
- We approach each case with integrated legal and accounting insight
- We’ve achieved favorable outcomes across multiple industries
We are leaders in strategic tax advisory in Panama.
Facing a Tax Audit? We Can Help.
At LAC Legal, we act quickly, strategically, and with full legal knowledge. We guide you from the moment you receive the first notice until the final resolution.