Convention on Mutual Administrative Assistance in Tax Matters

Panama signed on October 27, 2016 its adhesion to the Convention on Mutual Administrative Assistance in Tax Matters (MAC). This instrument provides for all forms of administrative cooperation between States in the assessment and collection of taxes, that includes: exchange of information on request, spontaneous exchange, tax examinations abroad, simultaneous tax examinations, assistance in tax collection and the service of documents. The Convention also provides for automatic exchanges of information, that will only require to be implemented an administrative agreement between the competent authorities of two or more interested Parties. The agreement would address issues such as the procedures to be adopted and the information that will be automatically exchanged.

Taxes covered by the Convention comprise a much wider range of taxes than bilateral double taxation agreements, including taxes on income, profits, capital gains and net wealth levied at the central government level; and also VAT / sales taxes, local taxes, compulsory social security contributions, estate, inheritance or gift taxes.

As to the approval process, the Convention has already been ratified by our National Assembly, and is expected to be sanctioned by the President of Panama in the next few days. Once this process is completed, the Convention shall enter into force on the first day of the month following the expiration of a period of three months after the date of deposit of the instrument of ratification of the treaty. Updates on the list of signatories, could be reviewed on the link that follows: http://www.oecd.org/ctp/exchange-of-tax-information/Status_of_convention.pdf

In addition to this effort to comply with international standards of tax transparency...