In a ceremony at the United States Department of the Treasury on November 30, the Treasury Secretary, Tim Geithner, and Panama’s Vice President and Minister of Foreign Affairs, Juan Carlos Varela, signed a new tax information exchange agreement (TIEA) between the United States and Panama.
"Today, we are ushering in a new era of openness and transparency for tax information between the US and Panama," Geithner announced. "This bilateral agreement to provide for the exchange of tax information between our two countries reflects the commitment of the US and Panama to the importance of transparency of tax information."
It was said that, upon entry into force, the new TIEA will provide the US with access to the information it needs to enforce US tax laws, including information related to bank accounts in Panama, regardless of whether the requested party has a domestic tax interest in such information.
The agreement will permit the US and Panama to seek information from each other on various types of national taxes, in both civil and criminal matters, for the tax years beginning on or after November 30, 2007.
It is specified in the TIEA that the US federal taxes covered are income taxes, taxes related to employment, estate and gift taxes and excise taxes. The taxes imposed by Panama in the agreement include income tax; real estate tax; vessels tax; stamp tax; notice of operations tax; tax on banks, financial and currency exchange companies; and insurance tax.
Information exchanged pursuant to the TIEA shall be used for tax purposes, although the information may also be used for other purposes as permitted under the provisions of the Treaty on Mutual Legal Assistance in Criminal Matters between the US and Panama, as long as the tax authorities of the country providing the information consents to such use in writing.
The US and Panamanian governments intend that the agreement shall enter into force as soon as is practicable following the enactment of any legislation by Panama that is necessary under its domestic laws in order for Panama to comply fully with the terms of the agreement. The government of Panama expects that this legislation will be enacted before the end of 2011.
"Today, we are ushering in a new era of openness and transparency for tax information between the US and Panama," Geithner announced. "This bilateral agreement to provide for the exchange of tax information between our two countries reflects the commitment of the US and Panama to the importance of transparency of tax information."
It was said that, upon entry into force, the new TIEA will provide the US with access to the information it needs to enforce US tax laws, including information related to bank accounts in Panama, regardless of whether the requested party has a domestic tax interest in such information.
The agreement will permit the US and Panama to seek information from each other on various types of national taxes, in both civil and criminal matters, for the tax years beginning on or after November 30, 2007.
It is specified in the TIEA that the US federal taxes covered are income taxes, taxes related to employment, estate and gift taxes and excise taxes. The taxes imposed by Panama in the agreement include income tax; real estate tax; vessels tax; stamp tax; notice of operations tax; tax on banks, financial and currency exchange companies; and insurance tax.
Information exchanged pursuant to the TIEA shall be used for tax purposes, although the information may also be used for other purposes as permitted under the provisions of the Treaty on Mutual Legal Assistance in Criminal Matters between the US and Panama, as long as the tax authorities of the country providing the information consents to such use in writing.
The US and Panamanian governments intend that the agreement shall enter into force as soon as is practicable following the enactment of any legislation by Panama that is necessary under its domestic laws in order for Panama to comply fully with the terms of the agreement. The government of Panama expects that this legislation will be enacted before the end of 2011.
