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Panama Out of Grey List

Contributed by Gerli Wren & Co.
11 July, 2011

About Double taxation Treaties signed by the Republic of Panama and a an broad picture on applicability of Double tax Treaties.

Double Tax Treaties are not an easy subject and each Treaty is somehow different.

Management and Control
Most treaties provide that tax should be imposed where the management and control is exercised.

For example UK companies with management and control in Cyprus are taxed in Cyprus and not in the UK.

Management and control is considered to be exercised where the majority of the directors reside and board meetings are held.

Physical presence

Many European Double Tax Treaties require a physical presence in addition to management and control in order to establish where a company is a tax resident and will pay taxes.

For example, some Clients requested to rent an actual office, employ secretarial staff, telephone, etc. for the company in order to ensure that the company will not be considered a tax resident of the country where carries commercial activity.

Withholding taxes

Every Treaty provides the taxes which must be withheld when paying dividends, interest and royalties from one country to another.

For example, Cyprus has a very good Double Tax Treaty with Ukraine which provides for zero withholding taxes when dividends, interest or royalties are paid from/to a Cyprus company to/from a Ukrainian company.


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