Panama became a member of the inclusive framework on Base Erosion Profit Shifting (BEPS) on October 31, 2016. In joining this framework, member countris, in coordination with the OECD Committee on Fiscal Affairs (CFA), will confront tax avoidance and improve the coherence of international tax rules on an equal footing, through the development, review, implementation and monitoring of agreed minimum standards in respect of BEPS related issues. All members of the inclusive framework participate in all meetings of the CFA and its working groups that relate to BEPS.

Minimum standards agreed to be initially implemented by associated countries relate to the following:

• Model provisions to prevent treaty abuse in inappropriate circumstances;
• Standardized country by country reporting that will give Tax Administrations a complete view of where profits and economic activities of a Multinational Entity area conducted, and the ability to use this information to assess transfer pricing and other BEPS issues;
• Peer review process to address harmful tax practices, that will include patent boxes to indicate harmful features and the commitment of the member country to adhere to a mandatory spontaneous exchange of relevant information on a taxpayer specific ruling (e.g. preferential regimes and substantial activities);
• Agreements to secure progress on dispute resolutions through a mutual agreement procedure.

Disclaimer

This document is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). Accordingly, the information in this document is not intended to constitute a legal advice or other professional advice or services. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser.