Panama Investor Blog

Panama and Colombia: Negotiating a Tax Information Sharing Deal

Yesterday Panama and Colombia come to a middle ground and were given 1 year for the purpose of negotiating an agreement to avoid the issue with double taxation, which can include provisions for sharing financial information from both countries. With a memorandum of understanding between governments settled, issues from the bilateral trade agendas will come to agreements.  

 

The big issue for Panama was the classification as Tax Heaven by the Colombian government and was added to their grey list. After this meeting, President Juan Manuel Santos signed a decree that stipulated the exclusion of Panama from this list, which was a requirement imposed by the Panamanian government to negotiate a tax deal on equal terms and without coercion.

 

The Vice President of Panama Isabel Saint Malo stated that with these measures of discrimination being removed, they had agreed to an agenda of conversations to fight the money laundering and the financing of terrorism and to stop double taxation. We were signing the decree through which we will remove Panama from the list of tax havens, after they sign a memorandum of understanding where they commit to a date by which to negotiate a deal," President Juan Manuel Santos said.

 

On the exchange of tax information from the accounts of Colombians in Panama, which is the primary objective of the neighboring country, Saint-Malo said “we are of the opinion that it is in the best interest of our country to explore the feasibility of an agreement to avoid double taxation which guarantees the users of our platform that services will be preserved and Colombian investment is encouraged in our country. "

 

The withdrawal of Panama from the list of tax havens of Colombia sent a couple of messages to the rest of the world, first, respect for our tax system; second, that Panama will claim the space for dialogue to evaluate alternatives; and third, that we are not willing to negotiate under pressure or to the race. "

 

For its part, the Government of Colombia said in a statement that the memorandum of understanding is the basis for negotiating a double taxation agreement and will include a clause of financial reporting standards of the Organization for Economic Cooperation and Development (OECD).

 

Colombia also referred to the agreement to cooperate on money laundering through the Unit of Financial Information and Analysis (FIAU, equivalent of the Financial Analysis Unit) and cooperation with international organizations. "This agreement reinforces that we seek and have established with all neighbors, to cooperate on all issues," said Colombian Foreign Minister.

 

"It's what we wanted from the start," Santos said. "It's good news for everyone."

With this being settled for now, we can move on knowing that Panama’s reputation is still protected and that even though some countries from around the world want to consider Panama as a tax heaven, it will continue to be what it is and regulations will take place in due time. 

 

 

 

IRS Launches the "Globalization of Tax Administration"

The IRS has come out and clearly stated their goals of creating a globalized tax administration. Initially it will focus on high net worth individuals but, you can bet that once the system is in place, they will target less wealthy individuals and ordinary citizens who have chosen to live outside their county.

Yes, they are very proud of their new initiative, and it is just a matter of time before they will be working with other countries tax collectors because they are all going broke. They must continue to increase taxation and resubstitute whatever wealth you have left in order to stay in power. They have to get their GLOBAL mechanism in place so they can squeeze everything they can out of anyone they can.

Excerpts from CNSNEWS.COM

The Internal Revenue Service has launched a new global program to target what it calls “high wealth individuals,” IRS Commissioner Douglas Shulman said Monday.
 
“Through our new global high wealth operating unit we are taking a unified look at the entire web of business and economic entities controlled by high wealth individuals so we can better assess the risk such arrangements pose to tax compliance,” Shulman said at the National Press Club on Monday.
 
Shulman said the IRS is using “our robust and evolving enforcement program that ensures that everyone pays what they owe.”

The IRS initiated its Global High Wealth Industry group in the fall.  Schulman told an October 26 meeting of the American Institute of Certified Public Accountants that it would be part of “the globalization of tax administration,” which he called a “game changing trend” in tax enforcement.
 
“This brings me to another important development--a game-changing trend--the globalization of tax administration,” said Shulman.

Read they rest of the unpleasant story here....