THE UK AND PANAMA have agreed a comprehensive double-taxation convention, ensuring companies and individuals with interests in both states are not taxed twice on the same cash.
The deal generally follows the OECD model on double taxation conventions. Important features include exemption from withholding tax on certain dividends and low withholding rates on interest and royalties. The agreement also includes the latest OECD exchange of information article.
The deal was signed off by secretary of state for foreign and commonwealth affairs William Hague and Panamanian foreign minister Fernando Núñez Fábrega.
The agreement will come into force once it has passed through both countries’ legislative procedures.
Gary Ashford, CIoT representative and tax member with Kinetic Partners said: “In the past, I’ve seen many structures with Panamanian companies involving UK beneficial owners. The Panama agreement is a traditional double-taxation agreement, but it’s a positive step towards exchanging information.”
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