The president, Ricardo Martinelli and his counterpart Lee Myung-bak took part as honorary witnesses to the signing of the Treaty for Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to income taxes between the two countries.
This initiative seeks to improve transparency and promote the attraction of foreign capital to generate greater confidence among investors. "With the signing of this treaty Panama is gaining credibility and demonstrates that we are a country that sets clear ground rules." said Martinelli.
The treaty with South Korea is the second signed during this first official visit of President Martinelli and Foreign Minister Juan Carlos Varela. The first agreement was with Singapore.
Martinelli Lee and Myung-bak were pleased with the signing of the agreement since it is intended to meet international standards and show fiscal transparency.
In addition to South Korea and Singapore, the country has signed treaties to prevent double taxation with Luxembourg, Mexico, Spain, Qatar, Barbados, Portugal and the Netherlands, while it has already negotiated and is awaiting sign-agreements with Italy, Belgium, France and Ireland. Under negotiation is an agreement with the Czech Republic.
The Panamanian government announced the signing of the agreement to avoid double taxation.
Vice President and Foreign Minister, Juan Carlos Varela, and the Minister of Foreign Affairs of Singapore, George Yeo, signed a Treaty for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to income taxes, the first such agreement signed with an Asian country.
The negotiations will bring to 12 the number of double taxation agreements it has, equalling the minimum required by the OECD.
Panama's Vice-minister for the Economy, Frank De Lima, indicated thta the agreements will mean that by next year the country will no longer be on the gray list held by the Organisation for Economic Co-operation and Development (OECD).