Panama Signs Dual Taxation Treaty with Qatar
Thursday, May 13 2010 @ 10:19 am EDT
Contributed by: Don Winner
Editor's Comment: Most of the countries in the world tax the activities occurring within their borders. Panama falls into this category. There are a handful of countries, like the United States for instance, who have decided that they should be able to tax the income and business activities of their citizens no matter where they are in the world. Obviously, this creates a situation of conflict between Panama and the United States. In the past several years the United States has taken a more aggressive approach towards trying to force other countries to provide them with additional information. The United States has used both direct and indirect economic pressure to arm twist countries like Panama into compliance. However, the very simple answer for Panama is that it makes no sense whatsoever for Panama to enter into some kind of an "information sharing" agreement with the United States, simply because the United States does not have any information Panama wants. The United States enters into these kinds of "information sharing" agreements with other nations that have a similar approach on taxation - such as France and Germany. The rest of the world is now getting tired of these strong arm tactics, and they are banding together to negotiate and sign hundreds of these bilateral "dual taxation treaties." On the surface these treaties make it easier for companies from Qatar (in this case) to do business in Panama, because any taxes they pay on income here will be reported to their home country, and they won't be taxed on that income again. That sounds simple and fair, right? However if the individual or company was from the United States they would still be taxed by the United States, even if they had to pay taxes in Panama. Basically no matter where you go in the world, Uncle Sam wants your money. Expect more and more of these kinds of agreements from Panama as they reach out to all of the hundreds of other countries in the world who are similarly tired of the strong arm economic tactics of the United States and others.