OECD Promotes Panama to List of Financially Transparent Countries
WASHINGTON, July 22, 2011 /PRNewswire-USNewswire/ -- Following the signing of a double taxation agreement with France on July 6, the Republic of Panama was placed by the Organization for Economic Cooperation and Development (OECD) on its list of countries who have substantially implemented international standards for exchange of information, commonly known as the "White List."
"Panama has moved aggressively to align its tax systems with international standards established by the OECD," said Alberto Vallarino, Minister of Economy and Finance for the Republic of Panama. "We are pleased to have reached this historic milestone, which further assures international investors of the stability of the Panamanian economy."
Panama has signed DTAs with France and 10 other countries, including Italy, the Netherlands, Spain, Qatar, Luxembourg, Korea, Singapore, Mexico, Barbados, and Portugal. Panama signed a Tax Information Exchange Agreement with the United States in November of last year. These agreements enable the transparent exchange of tax information and prevent the facilitation of tax evasion. A country must sign at least 12 of these agreements in order to be included on the OECD's list, which is a compilation of countries willing to cooperate against tax fraud.
Panama leads Latin America economically. In 2010, the country led the region in foreign direct investment, as a percent of GDP, with investments exceeding $2.3 billion. In the first quarter of 2011 alone, Panama's economy grew 9.7 percent from the previous year. It was ranked the 2nd most competitive economy in Latin America by the World Economic Forum's Global Competitiveness Report 2010-2011, and the International Monetary Fund projects that Panama will become the fastest-growing economy in Latin America and the Caribbean by 2015.
Panama has requested that the OECD's Global Forum further review its laws and domestic policies to ensure the tax treaties it has signed remain operational.
"The Martinelli Administration's pro-growth economic policies and alignment with international standards continue to create prosperity for our country and opportunities for our citizens," Vallarino said.
Distributed by HDMK, LLC on behalf of the Republic of Panama. Additional information is on file at the Department of Justice, Washington DC.
SOURCE Republic of Panama
Accordingly, Panama now moves into the substantially implemented category, becoming the 39th jurisdiction to do so since the progress report was first issued in April 2009.
Secretary General Angel Gurria said, “Panama has worked hard to achieve this milestone and has made remarkable strides toward complying with the international standards in a very short time. This is very welcome and shows the Global Forum is achieving its aims.” However, he cautioned that the Global Forum must still evaluate whether Panama’s domestic laws will allow for effective availability, access to and exchange of information. He said, “The government has introduced domestic changes so that the agreements can be effective. The Global Forum will follow up to make sure they work as intended. It is important that Panama continues to work to fully implement the standards.”
Following the Global Forum Phase 1 Peer Review of Panama (assessing the legal and regulatory framework), Panama has significantly amended its legislation to address some of the deficiencies identified by the Global Forum which resulted in Panama not moving forward to a Phase 2 review (assessment of the information exchange in practice). At the request of Panama, the Global Forum will soon undertake a further review of whether Panama’s domestic laws, including recent changes, will allow for effective exchange of information in practice.
More information about the Global Forum:
- Background briefing on the Global Forum
- Website of the Global Forum: www.oecd.org/tax/transparency
- Exchange of Information Portal: www.eoi-tax.org – Follow the latest news on exchange of information networks and peer reviews for all jurisdictions.
For further information, journalists should contact Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, (tel. +33 1 45 24 91 08, e-mail: firstname.lastname@example.org).
A progress report on the jurisdictions surveyed by the OECD Global Forum in implementing the internationally agreed tax standard on exchange of information for tax purposes.
The internationally agreed standard, developed by OECD and non-OECD countries in the context of the OECD’s Global Forum on Taxation and endorsed by G20 Finance Ministers in 2004 and by the UN Committee of Experts on International Co-operation in Tax Matters in October 2008, requires exchange of information on request in all tax matters for the administration and enforcement of domestic tax law without regard to a domestic tax interest requirement or bank secrecy for tax purposes. It also provides for extensive safeguards to protect the confidentiality of the information exchanged.
Panama Peer Review Report