The treaty to avoid double taxation will come into force in 2018 and includes a clause for exchanging tax information upon request, in accordance with OECD standards.

Ending a story that began two years ago when Colombia suggested including Panama on its list of tax havens, the government has finalised negotiations and announced that the treaty to avoid double taxation will be signed by presidents Santos and Varela in June this year and will take effect automatically in 2018.

Eltiempo.com reports that during a press conference the Minister of Finance of Colombia, Mauricio Cardenas, said that “…These agreements require a dose of confidentiality, which Colombia assures. This information can only be used for fiscal and tax purposes by the competent authorities,” stressed the minister. “The agreement we have reached will allow us to have access to information so that Colombians can make declarations in the country about their income in Panama. ‘”

“… The Finance Minister also explained that Colombians who have assets in the neighboring country should take this opportunity to normalize their situation by paying a penalty of 11.5% in order to legalize their situation in Colombia. “

From a statement issued by the Ministry of Economy and Finance (MEF):

The Minister of Economy and Finance of Panama, Dulcidio De La Guardia, and the finance minister of Colombia, Mauricio Cardenas, met today with the aim of resolving outstanding issues in the negotiation which has been going on between the countries for more than a year, with the aim of signing a treaty to avoid double taxation (DTT).

“We are pleased to announce that we have moved towards the signing of a treaty to avoid double taxation which includes a clause for exchanging tax information upon request, in accordance with the standards of the Organization for Economic Cooperation and Development (OECD),” said De La Guardia at the conclusion of the bilateral meeting.

Source: Eltiempo.com