Panama faces double standard as Europe moves on Brexit

EUROPEAN  countries offering tax incentives and more  to  attract financial businesses away from London after the Brexit  vote are  demonstrating a double standard says Panama lawyer Alvaro Tomas

Countries of the Organisation for Economic Co-operation and Development (OECD)  turning to tax competition demonstrates the “double standard” compared to the ways  that these countries have treated  Panama  he said.

The countries of the old continent, especially France, want to gain positions before an eventual output of financial firms in the UK after the vote on June 23, in which the British decided to leave the European Union.

France announced last week a package of incentives including discounts on income tax and the right to exclude foreign assets in  calculating capital tax for eight years instead of the current  five years.
The plan also includes deductions for fringe benefits such as schools paid by employers for the children of their workers and a single processing  center will be established for  foreign firms seeking to settle in France.
“We’re not at war with London  … but there is a competition and we want to make Paris the main financial center of Europe,” said the president of the Paris region, Valérie Pécresse, at the annual conference of the  French financial industry  according to Reuters
“We want to build the financial capital of the future,” said  French Prime Minister Manuel Valls.
POSTURING
“It is extremely curious, to say the least, that after the  diplomatic posturing made by the French Government  on the issue of tax competition they  seize the departure of the United Kingdom from the European Union is to offer a package of tax adjustments  to attract investment to France, “said Tomas
France is not the only country that has made offers of better tax conditions to UK entrepreneurs in an attempt to attract  businesses that could move  after the Brexit victory.

British Finance Minister, George Osborne, said that he would decrease taxes on corporations from 20% to 15% .

According to Reuters  he said that he  wants to build a “super-competitive” economy with low taxation for companies.

Meanwhile  Madrid is preparing a package of incentives that includes cuts in income tax, tax credits for hiring and other tax exemptions, according to Spanish business daily Expansion.

Some of the countries of the OECD have listed Panama as a tax haven.

“These were the countries that put the  most pressure on Panama and it turns out now that they  need to maintain or attract investment by resorting to tax competition,” said Tomas.

According to the lawyer , the  offer of  a difference in taxation between local and foreign companie  “Will make France by definition a tax haven,”

After the April publication of a global investigation into the Panamanian law firm Mossack Fonseca, which allegedly was used by politicians, athletes and entrepreneurs around the world to hide capital, France announced that it would include Panama in its list of tax havens.
The Gallic country noted that Panama had not fully complied with sending tax information as had been requested by their tax authorities.
Despite efforts through diplomatic channels and the commitment announced by Panama to join the automatic exchange of information following the standard OECD, France has not changed its position to include Panama in its list of tax havens from next year .
In an earlier interview, with La Prensa Panama  Minister of Economy and Finance of Dulcidio De La Guardia, said the decision to move to the requirements of the OECD was more pragmatic than emotional, since “the OECD and its members say, ‘Do what I  say, not what I do ‘. In particular, the main members  of the OECD. They are not in their legislation implementing the changes they are promoting. That is a reality.”