Impact of the Panama-Colombia Agreement

The agreement for Panama not to feature in Colombia's gray list establishes a deadline of one year for the signing of an agreement on double taxation and exchange of financial information, and is a sign that sooner rather than later, the Panamanian corporate and financial center will lose their comparative advantages.

Thursday, October 23, 2014

EDITORIAL

International pressure to establish a comprehensive and transparent flow of tax information, continuously increases with the OECD as a powerful locomotive, and puts up against the wall countries such as Panama where for many years international financial centers have existed with specialized services which attract corporate finance companies from around the globe with tax benefits and opacity in related information.

The Panama International Financial Center was and is very important for the economy, and it is logical that this sector defends the maintenance of the conditions that make it attractive for international investors. But as we said in the previous paragraph, the pressure of powerful countries seeking to prevent avoidance of tax incurred on the wealth of their national citizens is increasing.

As various analysts have already suggested, government officials and even industry representatives, the International Financial Centre must undertake an orderly retreat towards more realistic positions than mere resistance to the signing of any agreement for cooperation in tax reporting. In the end, a good control of losses is better than the demise of the business.

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More on this topic

Panama and the Inevitable Cost of Fiscal Transparency

May 2016

The pressure being put on Panama in the international context has finally forced it to make agreements to exchange tax information, with the most noteworthy being the agreement with Colombia because of the negative implications it has for the Panamanian banking sector.

Prensa.com reports that "...According to the Superintendency of Banks of Panama, at the end of 2015, deposits in the international banking center of Panama from Colombia totaled $6.251 billion, with the South American country being the main center for funds originating from foreign sources. "

Double Taxation Agreement Panama - Colombia

November 2015

In a seventh round of negotiations, an attempt will be made to lay the groundwork for an agreement that seeks to avoid damage to both countries.

If an agreement is not reached, Colombia will classify Panama as a tax haven, with a consequent increase in costs for bank transactions between the two countries, and exposing Columbia to the measures provided under Panama's Law of Retaliation.

Panama Relents and is Removed from Colombia's Gray List

October 2014

The Colombian government announced an understanding to negotiate a double taxation treaty according to OECD standards, allowing it to remove Panama from its list of tax havens.

A statement from the Ministry of Finance of Colombia:

Colombia and Panama Reach Agreement to combat tax evasion

Panama Closes Ranks Against Colombia  

October 2014

On the eve of the day fixed as the deadline for Panama to remove Colombia from its list of tax havens, the Chamber of Commerce, Industries and Agriculture says that the country is united in the defense of its interests.

A statement from the Chamber of Commerce, Industries and Agriculture (CCIYAP):

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