THE INTERGOVERNMENTAL agreement for the automatic exchange of financial information between Panama and the United States,  will come into effect in September 30.

Minister of Economy and Finance Dulcidio De La Guardia and U.S. Ambassador to Panama John Feeley signed the for the implementation of compliance with the Foreign Account Tax Compliance Act (Fatca), on Wednesday April 27.

The Fatca is a United States initiative passed in 2010, asking financial institutions around the world to provide information on the accounts of Americans abroad in order to fight tax evasion.

In accordance with a treaty negotiated with the last administration, the tax administrations of the two countries will be responsible for the exchange of information.

Panama and the U.S. aspired that the mechanism would go into effect in September 2015. However, the the two countries implementation was delayed until Sept. 30 of this year.

With Wednesday’s agreement, the General Directorate of Revenue (DGI) and its American counterpart will enter into a process of regulation of the law and will define the guidelines for the exchange of information.

The ministry said that the DGI has strengthened its human resources in recent years to attend to bilateral covenants and make effective exchanges of information, reports La Prensa

Both conventions to avoid double taxation and the exchange of tax information follow models proposed by the Organization for Economic Cooperation and Development (OECD).

The ministry said in a statement that with the signing of the agreement, exchanges of information will be made between the tax administrations of both countries.

“Panama continues to advance in the field of financial and fiscal transparency, promoting global cooperation in the field of the fight against tax evasion, money laundering and the financing of terrorism,” De La Guardia said.

Courtesy of NewsRoomPanama