(Prensa.com) The removal, in 2011, of Panama from the “grey lists” of the Organization for Economic Cooperation and Development (OECD), is expected to attract new investment and strengthen the International Banking Center (IBC) of the country. This, according to projections by Panamanian economists, such as Domingo Latorraca, from the consulting firm Deloitte and former Deputy Minister of Economy and Finance of Panama. His projections came after a lecture delivered at a forum on Double Taxation Treaties (DTTs), organized by the law firm RBC and the legal team LATAXNET.
“I think the platform of international services and the IBC in Panama will be strengthened and continue to grow, with the introduction of an element of transparency to enable this country to be known for “globally-recognized transparent operations,” he said.
Latorraca went on to say that, with Panama achieving 12 DTTs with OECD member countries this year, the corporations system that supports the international service platform established in Panama, will remain in effect and continue to thrive.
In this regard, he predicted that greater transparency will generate a flow of funds and “strong investment” in Panama, adding that the DTTs would not jeopardize the principle of confidentiality that governs the IBC; currently with total assets in excess of $73.3 billion.
Similarly, Carlos Cordero, from the DTT negotiating team, said the agreements signed will result in a “mechanism for attracting investment,”, with tax advantages for investors. However, he acknowledged, “any change brings resistance.”
Meanwhile, Carlos González Ramírez, an expert on corporations, challenged the treaty for the exchange of tax information (TIEA), signed with the United States (U.S.), and argued that the U.S. tax system is almost one-of-a-kind, and that differences between this treaty and the agreements to avoid double taxation “are great.”
Nonetheless, Cordero recalled that the Banking Association of Panama rated the TIEA signed in 2010 with Washington, which has a three-year retroactive period, as “positive”. The treaty was ratified in 2011, amid criticism by Panamanian economic groups.
Panama has also signed DTTs with South Korea, Singapore, Luxembourg, Mexico, Spain, Qatar, Barbados, Portugal, Holland, Italy, and the U.S., and is expected to sign others with Belgium, the Republic of Ireland, the Czech Republic, and France this year.
Panamanian Vice-Minister of Economy, Frank De Lima, said Monday at the RBC/LATAXNET forum that Panama is expected to finalize the treaty with Ireland in June, which would make it the 12th agreement signed, allowing Panama to meet the requirements for being removed from the “greylisting” of OECD countries.
“It is important to refresh the image of Panama, as some countries still perceive it as a tax haven,” said De Lima.