Panama, that has rocked by a recent major tax scandal, has joined around 100 countries in an agreement to share financial information automatically to tackle tax evasion.
Panama has officially signed agreement to comply with OECD standards on exchanging tax information. Panama has inked its adhesion to the Organisation for Economic Cooperation and Development’s reporting standards.
Foreign Minister Luis Miguel Hincapie delivered the document to OECD headquarters in Paris. The new membership however does not take practical effect until 2018.
The public gained its first access to the Panama Papers records of over 200,000 secret offshore companies when the International Consortium of Investigative Journalists (ICIJ) put a searchable database online in May.
The database, built on just a portion of the 11.5 million documents leaked from Panama’s Mossack Fonseca law firm, reveals more than 360,000 names of individuals and companies behind the anonymous shell firms.
The Panama Papers reveal the full extent to which the world’s wealthy, alongside criminals, create nominee companies to stash and transfer assets out of sight of the law and tax officials.
The information sharing scheme was already in the works when Panama came under pressure after the leak of thousands of confidential documents from a Panamanian law firm in April showed their failure to cooperate in global efforts to clamp down on tax evasion by the rich and powerful.
Bahrain, Lebanon, Nauru and Vanuatu are also signing up to the agreement on automatically swapping tax information, which around 100 countries have now joined. Such exchanges are expected to start in September 2018.