Panama Signs Tax Information Exchange Agreement With the United States (IRS)

Panama Signs Tax Information Exchange Agreement With the United States (IRS)

Wednesday, December 01 2010 @ 10:27 AM EST
Contributed by: Don Winner
Views: 85
Despite the dissent, Panama and the United States yesterday signed an Agreement on the Exchange of Tax Information. The signing, which took place in Washington DC, was held behind closed doors. The document was signed by U.S. Treasury Secretary Timothy Geithner and Vice President of the Republic of Panama, Juan Carlos Varela. “The agreement with the United States complies with the essential principles defined in its strategy, as the banking center of Panama will benefit from the country’s removal from discriminatory lists,” said the Minister of Economy and Finance, Alberto Vallarino. After the signing, the document must be approved by the Panamanian Cabinet Council, and thereafter be sent to the National Assembly for ratification, the Vice Minister of Economy Frank De Lima told Panama America. With this agreement, Panama has signed ten of the twelve treaties necessary to be removed from the “gray list” of tax havens. (Panama America)
Editor’s Comment: Politics in Panama are obviously domestic. Martinelli and most Panamanians simply don’t care to protect US citizens who are using Panama’s laws to evade taxes they owe to the US government. What matters more are the overriding strategic economic issues, and continuing to remain defiant on these issues would eventually cause more harm to the nation, and the “good” they were getting by having those funds on deposit. Back in the old days, when the Panamanian economy was much smaller and weaker, these funds were important. But now that Panama has taken over the management of the Panama Canal, what matters more are the big boy ratings – such as having all three houses rate Panamanian debt as investment grade, and staying off things like the “tax haven” lists of the OECD and others. I expect there are some people who will pull up stakes and move their operations to another country because of this agreement. However I also think the Panamanian lawyers will now get even more creative, and come up with new and better ways to still play within the rules, and continue to avoid the new swinging bats. Let’s see how this works out over time. Anyway, if Panama rolled over, they did so because that was what was best for Panama. You can now expect the ten newly arriving IRS agents who are working at the US embassy in Panama City to crawl right up your ass and set up camp.

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  1. Why Tax Information Exchange Agreements Are ‘Toothless’
    Despite the ominous messages being communicated to the public, taxpayers have little to fear from the tax information exchange agreements (TIEAs) to which most tax havens have rushed to commit.

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