1. PUBLISHED AGREEMENT:
The signing of this agreement reaffirms the country’s commitment to comply with international agreements that improve our image, in the fiscal and financial sphere.
During the BEPS Inclusive Framework meeting (Erosion of the Tax Base and the Transfer of Benefits, for its acronym in English), held last Thursday, January 24 at the OECD headquarters in Paris, Panama signed the MCAA agreement for reports country by country.
The exchange of reports country by country (Country by Country Reports or CbCR, for its acronym in English) implies the obligation for the headquarters of multinational groups that generate more than 750 million euros (US $ 857,925,000 US dollars) in annual income from:
• Report financial information related to the application of transfer pricing rules
• The obligation of the country where the parent company is established to exchange said information automatically with the rest of the countries where there are subsidiaries of the business group.
It is important to highlight that, as of the signing of this agreement, the General Directorate of Revenues (DGI) in Panama will have better collection tools.
In this act of signing the agreement, Darma Romero, head of the Tax Information Exchange Department of the DGI and Delegated Competent Authority of Panama participated in the company of the Director of Fiscal Affairs of the OECD, Pascal Saint Amans and the Ambassador of Panama in France, José Fabrega.
In addition to the signing of this MCAA Agreement, the Tax Administration is working on the domestic regulations that establish the obligation to present these reports in Panama and on the list of countries with which the exchange relationship will be activated, which will be informed in a timely manner.
This exchange of reports is part of the minimum commitments that Panama acquired by adhering in 2016 to the Inclusive Framework of BEPS, which seeks to prevent our tax system from being misused by some companies, to avoid paying taxes where it corresponds.
This event is another step in the right direction and, together with other elements, such as the approval of the bill that seeks to penalize tax evasion, will ensure that our country continues to be recognized as a cooperator in the international financial and tax sphere.
2. CONCLUSIONS AND RECOMMENDATION:
to. This exchange of reports is part of the minimum commitments that Panama acquired by adhering in 2016 to the BEPS Inclusive Framework, which seeks to prevent its tax system from being misused by some companies, to avoid the payment of taxes and tax evasion.
b. Due to the signing of the document, the Tax Administration is working on the local regulations that establish the obligation to present these reports in Panama to the taxpayers who apply in the associated profile and to the list of countries with which the exchange relationship will be activated, which will be informed in due course.
c. With the signing of this agreement, what is sought is to facilitate the exchange of information between tax authorities of different countries. In the future, the Panamanian Tax Administration must request sensitive information (level of sales, assets, tax actually paid in each country, etc.) from Multinational groups that have their headquarters in Panama.