Panama negotiates 4 Double Taxation Agreements

Panama is expected to sign a double taxation agreement (DTA) with Mexico in February 22, which will be the first of its kind, and will start in late January a diplomatic offensive in Europe to promote the signing of similar treaties. The deputy economy minister of Panama (MEF), Frank De Lima told reporters today that the agreement with Mexico, which is signed in the Mexican city of Cancun, does NOT imply a reform of the banking law, but does result in the tax reforms which the government intends to submit shortly to the legislature. According to the official, issues such as exchange of information and concepts as transfer pricing, which are not covered by existing legislation, will be included in the tax reform.
Panama negotiated since 2009 similar treaties with various countries, including Italy and Belgium, and is on track to do so with Spain.
Economy Minister Alberto Vallarino, will meet in Paris Jan. 25 with representatives of the OECD. The next day, Vallarino will meet with French Finance Minister Christine Lagarde, to try to determine the date of start of negotiations to conclude a tax treaty with that country. The delegation will visit Spain to meet with the Spanish authorities of finance, who already expressed to Panama their interest to negotiate a treaty of this nature. "Panama has sent letters to 21 of the 30 OECD countries expressing interest in negotiating double taxation treaties, and the Foreign Ministry is making concrete steps to achieve final dates with said countries" the Minister added. He noted that out of the OECD lists, Panama must have twelve agreements signed, and it is on the verge of agreeing the second of those with Italy, a country with which it will hold a second round of talks, the 26th and 27th of this month in the Panamanian capital.
Jan 13, 2010 http://www.pa-digital.com.pa/periodico/edicion-actual/hoy-interna.php?story_id=875612#axzz0jFKXpON9

Panama concludes negotiation of double taxation agreements with Mexico, Italy and Belgium.
Jan 22, 2010 http://www.estudio1panama.com/?p=24316

France negotiates Double Taxation Agreement with Panama in Paris at the end of next May. Spain is expected to sign a treaty on April 26 in Madrid and another with Qatar on May 10. Notices were also sent to Israel, Great Britain and other countries outside the Organization for Economic Cooperation and Development (OECD). "We received news that Luxembourg will negotiate with Panama in June" said ViceMinister Frank De Lima. The deputy minister also spoke of progress with other OECD countries, among which he highlighted:
- Mexico: signing of a treaty on 22 February, which is awaiting ratification by the legislatures of both countries.
- Italy and Belgium: only hope to define the date for signing the agreement.
- Barbados: the negotiations will begin on Monday 8 March in Panama.
- Netherlands: it is planned to begin negotiations the first week of April in Panama.
Mar 5, 2010 https://www.mef.gob.pa/Portal/2010-comunicados/2010-FRANCIANEGOCIARaTRATADODEDOBLETRIBUTACIONCONPANAMa.html

Barbados became the 4th nation to conclude negotiations of a DTA with Panama, and joined Mexico (signed on 22 February) Italy and Belgium.
Other negotiations: Netherlands: negotiations begin the first week of April, Spain: Negotiations begin this 26th of April in Madrid, Qatar: Starting on 10 May, France: Starting on May 25, Luxembourg: begin in June. Letters have also been sent to Switzerland, Israel and England, among other countries which are not members of OECD.
Mar 10, 2010 https://www.mef.gob.pa/Portal/2010-comunicados/2010-PANAMaCONCLUYENEGOCIACIoNCONBARBADOS.html

Minister of Economy and Finance, Alberto Vallarino and Viceminister, Dulcidio De La Guardia, met this Monday in Mexico with finance authorities of Chile, Japan and France, with regards to DTAs in order to have Panama removed from the OECD grey list.
Mar 22, 2010 https://www.mef.gob.pa/Portal/2010-Comunicados/2010-Durantemisinoficialenelexterior.html

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See also

Panama stays out of list of non-cooperative centers
http://mypanamalawyer.blogspot.com/2009/04/panama-stays-out-of-list-of-non.html

Economist: The G20 and tax - Haven hypocrisy
http://mypanamalawyer.blogspot.com/2009/04/economist-g20-and-tax-haven-hypocrisy.html

Panama currently has around 20 double taxation agreements for air and shipping transportation with countries such as U.S., U.K., Switzerland, Russia, Japan since the 1960s.
International Taxation of Low-Tax Transactions...

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How the U.S. Is a Tax Haven for Mexico's Wealthy

Federal Taxation
8/26/2009 11:37:34 AM EST

News Analysis: How the U.S. Is a Tax Haven for Mexico's Wealthy
By Robert Goulder, Editor-in-Chief - Tax Analysts International Publications
Posted by Tax Analysts Editorial Staff

As if Treasury Secretary Timothy Geithner didn't have enough on his plate, there's one underappreciated problem his department now must address. This latest headache can be summarized in three words: U.S. bank secrecy.

The issue landed on Geithner's desk shortly after he accepted his current job, in the form of a February 9 letter from Mexican Secretary of Finance Agustin Carstens. At first glance, its polite language seemed innocuous. Geithner most likely read the letter, mumbled "ho-hum," and added it to the stack of low-priority items on the back burner.

But six months later, Carstens's letter ­ and how Treasury will respond to it ­ has the potential to become a lightning rod for controversy. That's because the IRS and the Justice Department, after decades of passive acquiescence, decided to pick a fight with Swiss banking giant UBS, the world's largest manager of private wealth.

...

What does the letter contain that's so shocking?

It asks the U.S. government to offer Mexico the same exchange of information terms the United States has with Canada. That's significant because Canada is a special case when it comes to cross-border tax enforcement. Despite possessing one of the world's most comprehensive tax treaty networks, the United States has meaningful information exchange with only one country: Canada.

Mexico has now put the U.S. government on notice: It wants in on what's previously been Canada's exclusive arrangement. Should that inclination spread to other governments across the hemisphere, it could have extraordinary consequences for the U.S. financial sector. Think of it as the fiscal equivalent of the H1N1 flu virus.

...

Just as the United States spent the last year demanding that Switzerland give ground on its bank secrecy regime, Mexico now wants the U.S. Treasury Department to yield on its own bank secrecy.

Fair is fair, the argument goes, lest Washington be accused of extraordinary hypocrisy.

By now you're probably thinking that something is wrong here; U.S. banks must be very different from Swiss banks. Guess again ­ they're not.

...

Mexican residents who hold an account with a U.S. bank ­ just like U.S. account holders at Swiss banks ­ are essentially on the honor system when it comes to declaring bank deposit income for tax purposes in their home countries. As students of the subject have learned, tax law enforcement using the honor system translates to rampant tax evasion.

...

To the neutral observer it might seem that America's opposition to bank secrecy is highly selective. Perhaps we object only when it's our tax base that's being eroded.

Geithner now must decide whether Treasury spoke with a forked tongue in the United States' showdown with the Swiss. Mexico City is awaiting a response.

http://law.lexisnexis.com/practiceareas/Practitioners-Corner/Federal-Taxation/News-Analysis-How-the-US-Is-a-Tax-Haven-for-Mexicos-Wealth

U.S. Exporters Open Latin America Regional Office in Panama

Photos: Above: Gabriel Aguilar, Panama Canal Administrator Alberto Aleman Z., Ambassador Barbara Stephenson, USGC Regional Director Kurt Shultz, Jorge Lombardi. Aguilar and Lombardi are members of Lombardi Aguilar Group www.laglex.com, legal counsel for the Panama office. Below: USGC Board members during ribbon-cuttting ceremony at Ocean Business Plaza.

U.S. Grains Council Opens Latin America and Caribbean Regional Office
Contact Marri Carrow at 202-789-0789
Thursday, 18 March 2010 00:00

U.S. Grains Council Chairman Rick Fruth announced the official opening of the Council's newest international office in Panama City, Panama. The USGC Latin America and Caribbean Region office represents a key presence in the region as the Council continues its work of Developing Markets, Enabling Trade and Improving Lives.

"The failure of the United States to ratify pending free trade agreements in the area has caused a significant loss in grain business and trade. It also has had a consequential effect on the economic development of our friends and allies in the Latin American region," said Fruth. "By establishing an office in Latin America and the Caribbean region, the Council is strategically positioning itself to defend U.S. markets while simultaneously enhancing the quality of life of our trading partners."

Kurt Shultz was named the first director of the Panama City office. Shultz has worked for the Council since 1999 and previously served for seven years as USGC regional director for the Mediterranean and Africa before transitioning to his current post.

See full text in http://www.grains.org/news-events/2266-us-grains-council-opens-latin-america-and-caribbean-regional-office -

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La embajada estadounidense presidida por Barbara Stephenson, realizó un coctel de bienvenida a miembros del Consejo de granos de Estados Unidos

En el Hotel Marriott se organizó un elegante coctel con motivo de la visita de miembros de los miembros del Consejo de granos estadounidenses, los cuales establecerán una oficina regional para América Latina y el Caribe en Panamá, con la finalidad de afianzar el comercio entre las Américas. "La posición geográfica clave y punto de comercio internacional hace de Panamá un lugar muy atractivo para abrir esta oficina regional y hacer negocios", dijo el dirigente empresarial Rick Fruth. "Uno de los propósitos de nuestra organización es lograr un acercamiento entre Estados Unidos, Latinoamérica y el Caribe, para mejorar y profundizar el comercio de granos", expresó.

http://www.laestrella.com.pa/mensual/2010/03/18/contenido/214801.asp

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Consejo de Granos de los Estados Unidos abrió una oficina regional en Panamá

El Consejo de Granos de los Estados Unidos abrió una oficina regional en Panamá para cubrir sus actividades en Latinoamérica y el Caribe y por tal motivo, en conjunto con nuestra Embajadora ofreció una recepción para sus colaboradores y contactos en el área gubernamental y privada.

El Consejo de Granos de los Estados Unidos representa a productores y comercializadores de cebada, maíz, y sorgo de su país que exportan hacia el resto del mundo y en conjunto con el Departamento de Agricultura de los Estados Unidos contribuye al desarrollo económico mundial y a la rentabilidad de la agricultura.

La Exportación de Granos representa el 17% del total de carga transportada por el Canal de Panamá y de ese porcentaje, un 90% son granos originarios de los Estados Unidos.

http://spanish.panama.usembassy.gov/fas.html