Panamá and the United States will be exchanging banking information for tax and other purposes under terms of an agreement signed this week.
The so-called tax information exchange agreement gives U.S. officials access to suspect bank account information.
At the same time the Inter-American Development Bank said it was loaning Panamá $200 million for 20 years to do a compete overhaul of its tax structure.
Panamá has long been a place where U.S. citizens could stash unreported income from the Internal Revenue Service.
Said The Panamá News:
“Actually, the tax exchange agreement between Panama and the United States ends banking secrecy for those U.S. citizens or U.S. resident aliens who are being investigated by the IRS. It does not appear to directly affect those who are parking their money here to cheat ex-spouses out of property settlements, avoid child support payments or evade private creditors. It also does not allow Panamanians who have suffered at the hands of Panamanian shell companies without insurance or assets to identify and collect from those who profited at their expense.’
Officials of both the United States and Panamá signed the treaty in Washington Tuesday.
“Today, we are ushering in a new era of openness and transparency for tax information between the United States and Panama” Treasury Secretary Tim Geithner said. “This bilateral agreement to provide for the exchange of tax information between our two countries reflects the commitment of the United States and Panama to the importance of transparency of tax information.”
The agreement will permit the United States and Panamá to seek information from each other on all types of national taxes in both civil and criminal matters for tax years beginning on or after Nov. 30, 2007, said the Treasury Department. Information exchanged pursuant to the agreement shall be used for tax purposes, although the information may also be used for other purposes as permitted under the the provisions of the Treaty on Mutual Legal Assistance in Criminal Matters between the United States and Panamá as long as the tax authorities of the country providing the information consents to such use in writing, the department added..