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Tax Heavens?

Due to the growing world economic crisis, the major European countries have decided to take actions against the so called tax havens, requesting that those countries that are considered as such to regulate in a more reliable manner the laws that legalize this matter and to divulge information on people that have carried out offshore operations in their countries of origin. Countries such as Switzerland, Luxemburg, the principality of Andorra and others have been affected by these circumstances.

These major countries have also focused their attention on the Latin-American countries that are considered as tax havens and have applied pressure to their governments for them to comply with certain international cooperation rules and placing them in the so-called black lists if they don’t follow what is established by them.

The government of the Republic of Panama has mentioned this topic specifically in a letter sent by our country, to the Organization for the cooperation and Economic Development in Paris, France.

I believe it is convenient to mention that we are not a tax haven, since our country has a legal framework that is much stricter and more regulated than that of the countries considered as such; we are a country of international services, a world financial centre with a strictly territorial tributary system which makes it attractive for locals as well as foreigners that wish to invest in our country. This, together with other factors has produced a growth of over 11% in the economy, which is one of the highest in Latin-America.

Over the years and during the changes that have occurred on a world wide level, Panama has implemented certain actions so as to not enter in a conflict with the major international countries, letting them know about the Panamanian economy and its tributary system, adopting and approving certain laws for international cooperation such as the adoption of measures against terrorism, the incorporation of financial crimes to our Legal code, laws related to the supply of drug-dealing information, money laundering, terrorism and corruption. We know that it is extremely important to maintain an attractive level for foreign investment, while at the same time accepting that the times have changed and that we cannot turn our backs on the new regulations that are being implemented on an international level to fight organized crime.

Panama has agreed to participate and subscribe to certain bilateral agreements in order to avoid double fiscal imposition as long as it respects the following: (this text was extracted from the letter sent by Panama to the OECD).

  • The people’s privacy will be protected and No improper intromissions are guaranteed.
  • There will be no automatic exchanges of information.
  • There will be no improper triangulation of information supplied between the states.
  • The exchange of information will only be carried out based on individual requests with specific and justified bases.
  • There will be a fair transitional period to any measure that must be implemented and that has an impact of the platform of international services that the Republic of Panama Offers, meaning that the application of any measure will be applied at the same time as when similar measures are applied to each and every one of the states that are or not members of the OECD that panama considers competitors which supply international services;

This implies that Panama is willing to cooperate with the international organizations as long as it falls under what is fair and reasonable and in such a way that it does not affect foreign investment and the perception that is held of Panama as a world wide financial service centre

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47 Street, Bella Vista
Ocean Business Plaza Building
(Banesco Tower)
12 Floor, Suite 1203
Panama City, Rep of Panama.

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