Through the enactment of Law 51 of October 27, 2016, Panama officially undertook to implement the Common Reporting Standard ("CRS"). As a result of this law, Panamanian Reporting Financial Institutions ("RFIs") are required to carry out the detailed due diligence procedures of the CRS, aimed at determining whether a person holding a financial account is a tax resident in any foreign jurisdiction.
The CRS is the standard for the Automatic Exchange of Information ("AEOI") developed by the Organisation for Economic Co-operation and Development ("OECD") and refers to the regular exchange of financial information of accounts between participating jurisdictions for tax purposes. The purpose of the CRS is to detect and dissuade taxpayers from incurring tax evasion through the use of offshore bank accounts. The CRS requires RFIs (entities in participating jurisdictions that are a financial institution and that are not a non-reportable financial institution) to implement specific due diligence procedures to document and identify reportable accounts. Reportable accounts are those financial accounts maintained by reportable persons or by a passive non-financial entity with one or more reportable persons who exercise control.
Through Resolution No. 201-4037 of June 22, 2018, the General Directorate of Revenue (DGI, for its Spanish acronym) of the Ministry of Economy and Finance of Panama adopted the list of the 99 participating jurisdictions of the CRS for the AEOI, these being:
Anguilla, Antigua and Barbuda, Aruba, Bailiwick of Guernsey, Bailiwick of Jersey, Barbados, Belize, Bermuda, Canada, Commonwealth of Australia, Swiss Confederation, United Arab Emirates, State of Japan, State of Qatar, State of Israel, State of Kuwait , Independent State of Samoa, United Mexican States, Federation of Malaysia, Russian Federation, Federation of Saint Kitts and Nevis, Gibraltar, Grand Duchy of Luxembourg, Grenada, Greenland, Ireland, Isle of Man, Cayman Islands, Cook Islands, Faroe Islands , Turks and Caicos Islands, British Virgin Islands, Commonwealth of the Bahamas, Montserrat, Niue, New Zealand, Country of Curaçao, Principality of Andorra, Principality of Liechtenstein, Principality of Monaco, Hong Kong Special Administrative Region of the People's Republic of China, Special Administrative Region of Macao of the People's Republic of China, Kingdom of Saudi Arabia, Kingdom of Bahrain, Kingdom of Belgium, Kingdom of Denmark, Kingdom of Spain, Country Kingdom...