Panama has agreed to sign a multilateral tax treaty, which the Indian agencies believe will help them expedite investigations into the “Panama papers” recently made public by the International Consortium of Investigative Journalists.
The Organisation for Economic Cooperation and Development (OECD) on Monday announced that Panama formally communicated to the organisation on July 15 that it had decided to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
“We very much welcome Panama’s request to join the Convention. Signing and ratifying the Convention will be a very significant step forward in implementing its commitment to tax transparency and effective exchange of information,” said Pascal Saint-Amans, Director of the OECD’s Centre for Tax Policy and Administration, in a statement. India is among the 98 countries and jurisdictions that have already joined the Convention.
It was developed jointly by the OECD and the Council of Europe in 1988 and amended in 2010, in response to the call by the G20 to align it to the international standard on exchange of information and to open it to all countries, “thus ensuring that developing countries could benefit from the new transparent environment.” The Convention also represents a wide range of countries, including all G20, BRIICS and OECD countries, financial centres and several developing countries.
It is learnt that though Panama has decided to sign the Convention following an analysis of international expectations and consultations with the private sector, its commitment for automatic exchange of information would be only towards those countries with which it signs bilateral agreements.
“It is a positive development and in due course, will help the Convention participants like India exchange information on tax matters with Panama more swiftly,” said a government official.
