Panama-Colombia tax deal talks extended

AS PANAMA balks at a demand from Colombia that all bank transactions between the two countries are automatically reported, the two countries  have extended talks on an agreement to facilitate the exchange of financial information for 60 days.

The two countries have been holding talks within the framework of a memorandum of understanding signed in October 2014 that was triggered by the decision by Colombia to include Panama on a list of tax havens.

The agreement was supposed to have been signed by Sept. 30, but the new deadline is the end of November reports La Prensa.

Colombian Minister of Finance Mauricio Cardenas said that there are “still difficult issues that need to be resolved,” but said he was optimistic about the negotiations.

Gian Castillero, an adviser to the Ministry of Foreign Affairs, said that the two sides are in agreement on a number of points. But he also said that Panamanian authorities are reluctant to negotiate under the pressure of a deadline.

Colombia hopes to receive information from accounts that its citizens have in Panama in an effort to raise tax revenues, while Panama is trying to maintain the competitiveness of its financial and legal services platform.

According to the Superintendency of Banks, Colombians have almost $6 billion deposited in Panama.

President Juan Carlos Varela has pledged to move toward the automatic exchange of information, and the Organization for Economic Cooperation and Development (OECD) has endorsed the legal framework of Panama for the exchange of information.

Panama, however, has balked at a requirement that banks report all information automatically, instead of responding to specific requests.