Panama´s Petition to enter the Multilateral Convention on Mutual Administrative Assistance in Tax Matters
The Multilateral Convention on Mutual Administrative Assistance in Tax Matters emerged from the joint effort between the Organization for Economic Co-operation and Development (“OECD”) and the Europe Council 1988 and suffered an amendment in 2010 to adjust it to the new international standards. The purpose of this Convention is to promote international cooperation through the information exchange in order to obtain a better functioning of the tax laws and fight the harmful tax practices, such as tax evasion.
On July 15, 2016, Panamá publicly announced that it sent a letter to the OECD formally requesting the invitation to form part of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Said petition forms part of the measures adopted by Panama to improve its financial transparency regime and this way avoid entering into the list of tax heavens and non cooperating countries that will be published in July 2017 by the OECD.
When the invitation petition is received, the OECD will submit it to vote and if the Member States consensually agree, they will issue the invitation for Panama to adhere to the Convention. This will allow more than 100 jurisdictions to exchange tax information with the Panamanian State.