The Cabinet Council is supporting a bill to approve an Agreement between the Republic of Panama and the Czech Republic for the avoidance of double taxation and to prevent tax evasion with respect to taxes on income and its protocol.
From a press release from the Presidency of Panama:
Cabinet approves agreement for double taxation and preventing tax evasion number 14
Authorities of both countries have signed a Double Taxation Treaty (DTT).
With this agreement, Panama now has 13 TDTs signed which will enable the country to be de-categorized as a tax haven.
From a press release from the Ministry of Foreign Affairs:
On Wednesday the Foreign Minister, Roberto C. Henriquez signed with the Ambassador of the Czech Republic in Panama, Jiri Havlik, an agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Income Tax, making 13 Tax Treaties completed by Panama, the results of the National Strategy for the Defence of International Services and the country’s Finances.
Panama's competitiveness as a financial services center is being affected by tax information exchange treaties that are not two-way.
Panama has a tradition of double taxation which is not recognized by other nations who also require the signing of Information Exchange Agreements (IEA), but they are not based on reciprocity and this affects the competitiveness of banks and the country, said Adolfo Linares, president of the Chamber of Commerce in Panama.
In Costa Rica an agreement with the United Mexican States on the Exchange of Information in Tax Matters is in force.
From la Gaceta 101 of 25 May 2012:
PURPOSE AND SCOPE OF AGREEMENT
The competent authorities of the Contracting Parties will provide assistance through exchange of information that is foreseeably relevant to the administration and enforcement of domestic law with respect to taxes or tariffs covered by this Agreement.
Ecuador, where Panamanian companies have not been able to operate since 2009, has opposed the government of Panama’s decision to apply retaliatory measures.
Panama's inclusion in Ecuador’s list of tax havens has prevented Panamanian companies from participating as providers of goods or services in Ecuador since 2009, outlines Laestrella.com.pa.
"The mirror or retaliatory measures have been approved by Panama as ‘a mechanism to deal with restrictions’ and actions that are ‘discriminatory applied by Ecuador ’ in keeping its list of tax havens, according to the Panamanian government."
Adherence to the Multilateral Agreement involves sharing tax information with 23 countries, allowing advances to be made in international transparency policies and the fight against tax evasion.
A statement from the Finance Ministry reads:
COSTA RICA SIGNS INTERNATIONAL TAX COOPERATION CONVENTION WITH 23 COUNTRIES
• Efforts have earned the country’s removal from international list of tax havens
The French government has reported that Costa Rica will no longer appear in its list of states and territories who are non cooperative with regards to taxation.
A statement from the Presidency reads:
- Decision conducive to investment climate in the country.
- New information exchange agreements will be signed in the next few days
The Finance Minister of Costa Rica, Fernando Herrero, said Costa Rica was excluded from the list of tax havens drawn up by France in early 2010.
For the first six months of the year negotiations have been planned with Germany, the UAE and Hungary.
A press release from the Ministry of Economy and Finance reads:
The Panamanian government will continue to expand its network of tax treaties, despite already having the twelve treaties required by the OECD, reported by the Minister of Economy and Finance, Frank De Lima, who announced that for the first semester negotiations are planned with Germany, the UAE and Hungary.
Before April 2012 the country will negotiate double taxation agreements with the UAE and Hungary.
The announcement was made by the Minister of Economy and Finance, Frank de Lima, during the opening of the new ordinary session of the Legislature.
"The head of the Ministry of Economy and Finance stressed the importance of the ratification by the French legislature of the double taxation agreement with Panama signed last December and its departure from the "gray list " collated by the Organization for Economic Cooperation and Development (OECD). He said that the move by France means that later this month, when France makes its list of countries with uncooperative tax policies, Panama should be left out of this category", reported Prensa.com.
In January, the first Convention of Tax Information Exchange could be signed with Australia.
In order for this convention, and others are under negotiation, to be implemented, Congress needs to approve the banking secrecy law, which would allow access to accounts relating to tax matters, a requirement of the Organization for Economic Cooperation and Development (OECD).
In light of the decision by the Finance Committee of the French Senate, the Panamanian Presidency has issued a statement:
On the morning of Wednesday, December 14, the Government of Panama received a visit by Mr. Damien Loras, special envoy of President Nicolas Sarkozy, who confirmed France’s commitment to approving the Double Taxation Treaty with Panama in order to remove our country from the French list of countries not cooperating in the exchange of tax information.
The French government has approved a bill to formalize the double taxation agreement with Panama.
The French government issued a statement after the Council of Ministers meeting which says, "The French government today approved the bill to formalize the agreement on double taxation with Panama, whose final adoption should allow the Central American country to be removed from the French list of tax havens."
If Panama does not efficiently and effectively provide the information required by foreign authorities, it will worsen the current perception of non-cooperation.
An analysis of this thorny issue made by Carlos Barsallo, president of the National Securities Commission, makes clear that since 1949, the adoption of Act 62 of 1938, Resolution 38 October 1949 and the reform of the Tax Code 1957 and subsequent regulations, have the clear purpose of turning Panama into an offshore financial services center (commonly known as a tax haven).