‘pernicious' tax regime keeps Panama on EU black list

Presenting a “pernicious tax regime” for the exemption of income from foreign sources continues to be the reason why the European Union (EU) decides to keep Panama on its discriminatory list, for the fifth consecutive year.

In the conclusions provided in the last update of the list on February 24, 2023, the Council of the EU explained that to date, the country does not have a minimum qualification from the Global Forum on Transparency and Exchange of Information for Tax Purpose

The cataloging of a “pernicious tax regime” is a drag issue that comes from 2019, when Panama entered the EU’s discriminatory list for the second time.

The Council of the EU, throughout this period, has defined that the tax system of the Republic of Panama is “risky and detrimental” to the tax or fiscal base of other countries.

Economists and international organizations agree that this classification is due to the “little planning” and “submissive attitude” that the different governments of the country have had to deal with this issue.

A fiscal setback 
For the economist Maribel Gordón, there are several factors to which this situation is attributed. One of them is that the Panamanian tax system, as well as financial and banking institutions “do not meet the conditions” of a process that allows “transparency” and “real control of the resources that enter the country the capital and what is the intention of (these people) when locating in our country.” The economist pointed out that “in order for the resources to enter legally, there must be an infrastructure that allows them to favor the Panamanian economy, otherwise, it will only continue to favor some banking and financial corporations.