Panama Leaning Toward Double Taxation Treaties Instead of TIEAs

By EDITH CASTILLO DUARTE for La Prensa - Panama should define within 15 days the policy the country will follow to defend its international and financial services, which in the past year have been in the sights of the of the Organization for Economic Cooperation and Development (OECD) and the G-20. The options seem to be between agreeing to sign treaties to avoid double taxation, or to sign treaties agreeing to the exchange of fiscal information. Signing these types of treaties would be apart from any changes that might be made to the current existing system of corporations. For the moment, it seems there is agreement between government officials and the business leaders who are involved in these discussions in that the most desirable for the interests of the country would be to take the route of signing international agreements to avoid double taxation. This occurs when two or more countries believe they have the right to tax a certain income. In such cases, an income might be taxed by more than one state. (more) (See Comments)

Editor's Comment: There is a war brewing between the countries with the largest economies in the world, the G-20, and smaller countries like Panama, over the issue of "tax havens." The United States, for example, considers it their right to tax income earned by US citizens no matter where those citizens happen to reside in the world. Panama, on the other hand, considers it their right to tax income earned in Panama, by anyone, no matter what flavor of passport they happen to be carrying. The conflict created is obvious - both Panama and the United States want my money. The United States is trying to pressure Panama and other countries into signing what are known as Tax Information Exchange Agreements (TIEAs). These kinds of agreements make the most sense between two countries that both have large corporations operating within the other's shores - like between the United States and Japan, for example. But Panama simply does not care at all if a Panamanian citizen goes to the United States to work and earns a million dollars a year. They only tax income earned within the boundaries of the Republic of Panama. Therefore, it makes no sense whatsoever for Panama to sign a Tax Information Exchange Agreements (TIEA) with the United States, because all of the information would be going one way - from Panama to the United States. Basically, the US wants a fishing license to be able to dig through all economic activity in Panama to try to find where US citizens are earning income, so they can tax it. Panama will probably take another approach - to tell the United States that they will be happy to negotiate and sign a Dual Taxation Treaty (DTT) - designed to make sure the same income is not taxed twice by two different jurisdictions. All of this is designed, of course, to keep the United States and other countries at bay, to appease those who would allege Panama is a "tax haven" country, and to still allow Panama to operate as an attractive international banking and financial center. It is now perfectly apparent that Panama will not, in fact, roll over, slip a pillow under their hips, and smile over their shoulder on this issue.

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Priorities - The Minister of Economy and Finance, Alberto Vallarino, who takes the lead in the talks because he also presides over the High Level Commission for the Defense of International and Financial Services, recognizes that a country like Panama, which has a tax structure based on territorial income (i.e., Panama only taxes income generated by individuals or companies within Panama), would have little use for any kind of an agreement providing for the exchange of tax information (because Panama does not try to tax income earned by Panamanian individuals or corporations outside of Panama), but those kinds of agreements designed to avoid double taxation would be very beneficial.

To opt to sign agreements to avoid double taxation, the priority would be to sign these kinds of agreements with countries who are major investors in Panama, or countries with which Panama is a major trading partner such as the United States, Germany, France, Spain, United Kingdom and Mexico.

In these agreements to avoid double taxation, the signatory states agree to not tax certain income streams and agree that only one of the States has the right to charge a tax, or a tax sharing scheme is agreed upon, in other words both countries raise the total tax payable by the taxpayer.

These agreements cover not only the rules that will be used to avoid double taxation but also the mechanisms for collaboration between tax administrations to detect cases of tax evasion.

According to lawyer Eduardo Morgan and the President of the Chamber of Commerce, Adolfo Linares, it would be best for Panama to negotiate and sign treaties dealing with issues of double taxation, which is the international trend due to the economic advantages these kinds of agreements offer the signatory countries as well as their citizens, instead of Tax Information Exchange Agreements (TIEAs).

Linares recommends that parameters must be defined, and these types of agreements must be signed selectively, excluding any country that includes Panama on any kind of a "Blacklist."

Tax Information Exchange Agreements (TIEAs) are treaties designed to manage the interchange of tax related information (and in this they focus on the few clauses that make them up), through which the the signatory countries obtain more advantages, such as being able to detect or prevent tax evasion through collaboration among the tax authorities of the different countries.

Dual Taxation Treaties (DTT), however, have multiple benefits for the signatory countries; they generate a climate favorable to investment, tax laws are clearly defined (as to what tax is charged in each country), and they allow for specific clauses to stimulate interest, dividends, and royalties, among others.

The President of the Association of International Lawyers, Gian Castillero, believes if Panama chooses the Dual Taxation Treaty (DTT) route, an effective political and diplomatic effort would be required to dissuade the industrualized countries, with whom we have active commercial relationships, to agree to this type of agreements and not Treaties for the Interchange of Tax Information.

In the same way, he said, the formation of a top-level team of technical negotiators would be required to act in the best interests of our country.

PANAMÁ DISCUTE LA ESTRATEGIA PARA DEFENDERSE DE LA OCDE

Evitar el doble tributo es la vía

Hay coincidencia entre el gobierno y los gremios que lo más conveniente para el país es la firma de acuerdos para evitar la doble tributación.

SERVICIOS. El sistema financiero, la marina mercante y el régimen de sociedades anónimas son pilares de la economía. LA PRENSA/Eric Batista

EDITH CASTILLO DUARTE ecastillo@prensa.com

En 15 días, Panamá debe definir la política a seguir en la defensa de los servicios internacionales y financieros, que en el último año han estado en la mira de la Organización para la Cooperación y el Desarrollo Económico (OCDE) y el G-20.

Las opciones parecen estar entre acceder a la firma de tratados para evitar la dobletributación (TDT) o tratados de intercambio de información fiscal TIIF). Aparte de los cambios que se deben hacer al régimen de sociedades anónimas.

Por el momento, pareciera que hay coincidencia entre las autoridades gubernamentales y los gremios involucrados en estas discusiones en que lo más conveniente a los intereses del país es acceder a la firma de acuerdos para evitar la doble tributación.

Esta se presenta cuando dos o más países consideran que les pertenece el derecho de gravar una determinada renta. En esos casos, una misma ganancia puede resultar gravada por más de un Estado.

Las prioridades

El ministro de Economía y Finanzas, Alberto Vallarino, quien lleva el liderazgo en las conversaciones porque además preside la Comisión de Alto Nivel para la Defensa de los Servicios Internacionales y Financieros, reconoce que un país como Panamá, que tiene renta territorial, es muy poco el uso que le pueda dar a un acuerdo de intercambio de información fiscal, pero el que evita la doble tributación tienen beneficios muy buenos.

De optar por la firma de acuerdos para evitar la doble tributación, habría prioridad de firmar con países que son importantes inversores o con los que Panamá tiene un intercambio comercial importante, como Estados Unidos, Alemania, Francia, España, Gran Bretaña y México.

En los convenios para evitar la doble tributación , los países firmantes renuncian a gravar determinadas ganancias y acuerdan que sea sólo uno de los Estados el que cobre el impuesto o que se realice una imposición compartida, es decir, que ambos países recauden parte del impuesto total que debe pagar el contribuyente.

Estos convenios contemplan no sólo las reglas que se usarán para evitar la doble imposición sino también los mecanismos para la colaboración entre las Administraciones Tributarias a fin de detectar casos de evasión fiscal.

A Panamá, según coincidieron en señalar el abogado Eduardo Morgan y el presidente de la Cámara de Comercio, Adolfo Linares, le convendría la negociación o suscripción de tratados de doble tributación, que es la tendencia internacional, por las ventajas económicas que ofrece a los países contratantes y a sus nacionales, en lugar de los TIIF.

Aunque Linares recomienda que se deben definir parámetros y firmar este tipo de acuerdos selectivamente, excluyendo a todo país que incluya a Panamá en listas negras.

Los TIIF son tratados destinados al intercambio de información tributaria (y en eso se enfocan las pocas cláusulas que los conforman), sin que los países contratantes obtengan más ventajas que las de poder detectar o prevenir la evasión fiscal a través de la colaboración entre sus autoridades tributarias.

Los TDT, en cambio, tienen múltiples beneficios para los países contratantes: generan un ambiente favorable a la inversión, definen las potestades tributarias (qué renta se cobra en cada país) y permiten establecer cláusulas específicas de estímulo en materia de intereses, dividendos y regalías, entre otros.

El presidente de la Asociación de Abogados Internacionales, Gian Castillero, considera que si Panamá opta por los TDT requerirá de un efectivo esfuerzo político y diplomático que permita disuadir a los países industrializados, con quienes tenemos una activa relación comercial, a que suscribamos este tipo de acuerdos y no los TIIF.

De igual manera, dijo, requerirá de la conformación de un equipo técnico negociador de primer nivel que pueda actuar en aras de los mejores intereses de nuestro país.