On August 14, 2018, the Panamanian Cabinet Council issued Resolution No. 66 authorizing the Minister of Foreign Affairs to submit to the National Assembly a draft bill to ratify the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”).
Panama submitted its MLI position at the time of signature, listing its reservations and notifications, and included 17 tax treaties to be covered by the MLI. On January 24, 2018, Panama signed the MLI at the second OECD signing ceremony in Paris. See BEPS Action 15.
As of March 22, 2018, the OECD announced that five jurisdictions – Austria, the Isle of Man, Jersey, Poland, and Slovenia – have ratified the MLI, which entered into force on July 1, 2018. The MLI will enter into force in Panama on the first day of the month following the expiration of three calendar months after the deposit of its instrument of ratification with the OECD.
Panama listed the following tax treaties as Covered Tax Agreements (CTAs), which will be modified by the MLI if Panama and the corresponding CTA partners ratify the MLI under their domestic laws: Barbados; Czech Republic; France; Ireland; Israel; Italy; Luxembourg; Mexico; the Netherlands; Portugal; Qatar; Singapore; South Korea; Spain; the U.K.; United Arab Emirates; and Vietnam.
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