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Panama signs tax avoidance convention

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Panama signs tax avoidance  convention

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PANAMA and high-level officials from Barbados, Côte d’Ivoire, Jamaica, Malaysia, and Tunisia have signed an OECD  Multilateral Convention to reduce opportunities for tax avoidance by multinational enterprises.

The Convention is the first multilateral treaty of its kind, allowing jurisdictions to integrate results from the OECD/G20 BEPS Project into their existing networks of bilateral tax treaties. “Today’s signing of the multilateral convention is another major step towards updating the international tax rules through the swift implementation of the BEPS package,” said OECD Secretary-General Angel Gurría. “Beyond saving signatories from the burden of re-negotiating thousands of  tax treaties bilaterally, the convention results in more certainty and predictability for businesses, and a better functioning international tax system for the benefit of our citizens.”

 

http://www.newsroompanama.com/business/panama-4/panama-signs-tax-avoidance-convention

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I'm probably being too picky here, but tax avoidance is perfectly legal and almost everyone engages in it to keep their lawful taxes as low as possible.

Tax evasion is when you hide the fact that you owe lawful taxes. That's illegal.

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not being picky at all.  You're 100% correct.  In fact, I recently had to explain that difference to my Panamanian lawyer.

So I'm confused, this tax avoidance treaty; does it mean that now avoiding taxes is illegal?

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On 2/17/2018 at 8:27 PM, Sassy Blake said:

So I'm confused, this tax avoidance treaty; does it mean that now avoiding taxes is illegal?

I think it's translation issue or just sloppy use of language.  Everyone "avoids" paying sales tax whenever they choose not to buy a particular item, for example. 

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In this case, isn't it about hiding money offshore in order to avoid taxation at home?

The Canada Revenue Agency conducted a number of raids last week based on info gleaned from the Panama Papers related to this issue.

http://www.cbc.ca/news/politics/cra-panama-papers-raids-vancouver-toronto-calgary-1.4535565

Edited by Keith Woolford

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Yeah, this tax treaty is about using foreign bank accounts to hide taxable income, which is classic tax evasion.  It may reduce tax cheating but it will likely increase the use of crypto currencies like Bitcoin to accomplish the same thing. 

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