Panama: Still on grey listing

At the end of 2009, the Panamanian government adopted a national policy with the purpose of being excluded from the OECD grey listing. Despite having worked hard to face this challenge, and having made great progress in fulfilling the requirements that have been imposed, (such as ten International Tax Information Exchange Agreements, of which eight are active, and the negotiation of twenty Agreements to Avoid Double Taxation, fourteen of which are active at the beginning of July 2014) the possibility that Panama will return to discriminatory lists was mentioned.

It was indicated that the country shows deficiencies in complying with recommendations that the OECD has provided regarding prevention control on money laundering in the financial system. This initiative was being suggested despite the fact that since February

2011, Panamanian legislation enforces resident agents of legal entities to know their clients.

Additionally, for example, countries like Dominican Republic, Peru, Brazil and El Salvador maintain Panama on discriminatory taxation lists, considering Panama as a low tax jurisdiction, tax haven, Free Zone, or with special legislation such as the one established for Multinational Enterprises Headquarters (HME). There will be a similar situation when the Colombian Government places Panama on grey listing, since no tax information exchange agreement has yet been reached with that country.

It is therefore expected that the new government, which took office on 1 July 2014, will take actions in order to reduce the impact of these situations that are placing Panama in the grey listing, such as signing this type of agreements, or it will continue to operate under great pressure if it refuses to do so.


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