Panama inks multilateral tax pact to end bank secrecy

KR Srivats New Delhi | Updated on January 16, 2018

Coming clean: The agreement will allow Panama to activate bilateral exchange relationships with 97 other jurisdictions

Signs up for international efforts against tax evasion

Panama, a popular tax haven that was in the eye of a data-leak storm dubbed ‘Panama Papers’ in 2016, has finally signed an international agreement that would pave the way for exchange of financial account information with the international community.

By signing this agreement — CRS Multilateral Competent Authority Agreement (CRS-MCAA) — at the OECD headquarters in Paris on January 15, Panama has re-affirmed its commitment to start the OECD/G-20 Common Reporting Standards (CRS) exchanges with all interested partners from September this year.

The signing of the CRS-MCAA will allow Panama to activate bilateral exchange relationships with the 97 other jurisdictions that have so far joined the agreement.

Panama’s delegated Competent Authority and its Director-General of Revenue Publio Ricardo Cortes signed the CRS-MCAA, in the presence of OECD Deputy Secretary General Masamichi Kono.

At the signing ceremony, OECD Deputy Secretary-General Kono said: “I congratulate Panama on taking this very substantial step towards putting in place a truly global exchange network for the automatic exchange of financial account information. Your signing today (on January 15) puts Panama in an excellent position to fully deliver on its commitment to start CRS exchanges with all interested appropriate partners in September of this year”.

It may be recalled that Panama had on July 15, 2016 — soon after the ‘Panama Papers’ expose — conveyed to the OECD, a club of rich nations, its intention to form part of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC), which is now seen as “gold standard” for cooperation in tax administration.

CRS-MCAA is the prime international agreement for implementing the automatic exchange of financial account information under MAC.

Published on January 16, 2018

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