AGREEMENT BETWEEN 

THE GOVERNMENT OF THE UNITED STATES OF AMERICA 

AND 

THE GOVERNMENT OF THE REPUBLIC OF PANAMA 

FOR TAX COOPERATION AND THE EXCHANGE OF 

INFORMATION RELATING TO TAXES 

Whereas the Government of the United States of America and 

the Government of the Republic of Panama ("the Parties") wish to 

establish the terms and conditions governing tax cooperation and the 

exchange of information relating to taxes; 

Now, therefore, the Parties have agreed as follows: 
2
 

ARTICLE 1 

SCOPE OF THE AGREEMENT 

The competent authorities of the Parties shall provide 

assistance through exchange of information that may be relevant to 

the administration and enforcement of the domestic laws of the 

Parties concerning the taxes covered by this Agreement, including 

information that may be relevant to the determination, assessment, 

enforcement or collection of tax with respect to persons subject to 

such taxes, or to the investigation or prosecution of criminal tax 

matters. 

 ARTICLE 2 

JURISDICTION 

Information shall be provided in accordance with this 

Agreement by the competent authority of the requested Party without 

regard to whether the person to whom the information relates is, or 

whether the information is held by, a resident of a Party. However, a 

requested Party is not obliged to provide information which is neither 

held by its authorities nor in the possession or control of persons who 

are within its territorial jurisdiction. For purposes of the preceding 

sentence, “authorities” includes all government agencies, political 

subdivisions, and local authorities. 

ARTICLE 3 

TAXES COVERED 

1. This Agreement shall apply to the following taxes 

imposed by the Parties: 

(a) in the case of the United States, all federal taxes; 

and 

(b) in the case of Panama, all national taxes. 

2. This Agreement shall apply also to any identical taxes 

imposed after the date of signature of the Agreement in addition to or 

in place of the existing taxes. This Agreement shall also apply to any 

substantially similar taxes imposed after the date of signature of the 

Agreement in addition to or in place of the existing taxes if the 

competent authorities of the Parties so agree. The competent 

authority of each Party shall notify the other of any substantial 

changes to the taxation and related information gathering measures 

covered by this Agreement. 
 

 

3
 

3. This Agreement shall not apply to taxes imposed by 

states, municipalities or other political subdivisions, or possessions of 

a Party. 

ARTICLE 4 

DEFINITIONS 

1. In this Agreement the term: 

(a) "competent authority" means, for the United States, 

the Secretary of the Treasury or his delegate, and for Panama, the 

Ministry of Economy and Finance or its delegate; 

(b) “criminal tax matters” means tax matters involving 

intentional conduct which is liable to prosecution under the criminal 

laws of the requesting Party; 

(c) “criminal laws” means all criminal laws designated 

as such under domestic law, irrespective of whether contained in the 

tax laws, the criminal code or other statutes; 

(d) "information" means any fact, statement, document 

or record in whatever form; 

(e) "information gathering measures" means judicial, 

regulatory, criminal, or administrative procedures enabling a 

requested Party to obtain and provide the information requested; 

(f) “national” of a Party means: 

i) any individual possessing the nationality or 

citizenship of that Party, and 

ii) any legal person, partnership, or association 

deriving its status as such from the laws in force in that Party. 

(g) "person" means a natural person, a company or any 

other body or group of persons; 

(h) "requested Party" means the Party to this 

Agreement which is requested to provide or has provided information 

in response to a request; 

(i) "requesting Party" means the Party to this 

Agreement submitting a request for or having received information 

from the requested Party; and 
 

4
 

(j) "tax" means any tax covered by this Agreement that 

is imposed at the national or federal level by a Party, not including 

customs duties. 

2. For purposes of determining the geographical area within 

which jurisdiction to compel production of information may be 

exercised, the term "United States" means the territory of the United 

States of America, including Puerto Rico, the Virgin Islands, Guam, 

and any other United States possession or territory. 

For purposes of determining the geographical area within which 

jurisdiction to compel production of information may be exercised, the 

term "Panama" means the territory of the Republic of Panama in 

accordance with international law and its domestic legislation. 

3. Any term not defined in this Agreement, unless the 

context otherwise requires or the competent authorities agree to a 

common meaning pursuant to the provisions of Article 9 of this 

Agreement, shall have the meaning which it has under the laws of the 

Party applying this Agreement, any meaning under the applicable tax 

laws of that Party prevailing over a meaning given to the term under 

other laws of that Party. 

ARTICLE 5 

EXCHANGE OF INFORMATION UPON REQUEST 

1. The competent authority of the requested Party shall 

provide upon request by the competent authority of the requesting 

Party information for the purposes referred to in Article 1 of this 

Agreement. Such information shall be exchanged without regard to 

whether the requested Party needs such information for its own tax 

purposes or the conduct being investigated would constitute a crime 

under the laws of the requested Party if it had occurred in the territory 

of the requested Party. The competent authority of the requesting 

Party shall only make a request for information pursuant to this Article 

when it is unable to obtain the requested information by other means, 

except where recourse to such means would give rise to 

disproportionate difficulty. 

2. If the information in the possession of the competent 

authority of the requested Party is not sufficient to enable it to comply 

with the request for information, the competent authority of the 

requested Party shall take all relevant information gathering 

measures to provide the requesting Party with the information 

requested, notwithstanding that the requested Party may not, at that 

time, need such information for its own tax purposes. Privileges under 

the laws and practices of the requesting Party shall not apply in the 

execution of a request by the requested Party and such matters shall 

be reserved for resolution by the requesting Party. 
 

5
 

3. If specifically requested by the competent authority of the 

requesting Party, the competent authority of the requested Party 

shall, to the extent allowable under its domestic laws, 

(a) specify the time and place for the taking of 

testimony or the production of books, papers, records, and other 

tangible property; 

(b) place the individual giving testimony or producing 

books, papers, records and other tangible property under oath; 

(c) secure original and unedited books, papers, and 

records, and other tangible property; 

(d) secure or produce true and correct copies of original 

and unedited books, papers and records; 

(e) determine the authenticity of books, papers, records 

and other tangible property produced, and provide authenticated 

copies of original records; 

(f) examine the individual producing books, papers, 

records and other tangible property regarding the purpose for which 

and the manner in which the item produced is or was maintained; 

(g) permit the competent authority of the requesting 

Party to provide written questions to which the individual producing 

books, papers, records and other tangible property is to respond 

regarding the items produced; 

(h) perform any other act not in violation of the laws or 

at variance with the administrative practice of the requested Party; 

(i) certify either that procedures requested by the 

competent authority of the requesting Party were followed or that the 

procedures requested could not be followed, with an explanation of 

the deviation and the reason therefor. 

4. Each Party shall ensure that it has the authority, for the 

purposes referred to in Article 1 of this Agreement and subject to 

Article 2 of this Agreement, to obtain and provide, through its 

competent authority and upon request: 

(a) information held by banks, other financial 

institutions, and any person, including nominees and trustees, acting 

in an agency or fiduciary capacity; and 

(b) information regarding the ownership of companies, 

partnerships, trusts, foundations, and other persons, including within 
6
 

the constraints of Article 2 of this Agreement, ownership information 

on all such persons in an ownership chain; in the case of trusts, 

information on settlors, trustees and beneficiaries; and in the case of 

foundations, information on founders, members of the foundation 

council and beneficiaries. 

However, notwithstanding subparagraph 4(b), this Agreement does 

not create an obligation on the Parties to obtain or provide ownership 

information with respect to publicly traded companies or public 

collective investment funds or schemes, unless such information can 

be obtained without giving rise to disproportionate difficulties. 

5. Any request for information made by a Party shall be 

framed with the greatest degree of specificity possible. In all cases, 

such requests shall specify in writing the following: 

(a) the identity of the taxpayer whose tax or criminal 

liability is at issue; 

(b) the period of time with respect to which the 

information is requested; 

(c) the nature of the information requested and the form 

in which the requesting Party would prefer to receive it; 

(d) the matter under the requesting Party’s tax law with 

respect to which the information is sought; 

(e) the reasons for believing that the information 

requested may be relevant to tax administration and enforcement of 

the requesting Party, with respect to the person identified in 

subparagraph (a) of this paragraph; 

(f) grounds for believing that the information requested 

is present in the requested Party or is in the possession or control of 

a person within the jurisdiction of the requested Party; 

(g) to the extent known, the name and address of any 

person believed to be in possession or control of the information 

requested; 

(h) a statement as to whether the requesting Party 

would be able to obtain and provide the requested information if a 

similar request were made by the requested Party; 

(i) a statement that the requesting Party has pursued 

all reasonable means available in its own territory to obtain the 

information, except where that would give rise to disproportionate 

difficulty. 
7
 

ARTICLE 6 

POSSIBILITY OF DECLINING A REQUEST 

1. The competent authority of the requested Party may 

decline to assist: 

(a) where the request is not made in conformity with 

this Agreement; 

(b) where the requesting Party has not pursued all 

reasonable means available in its own territory to obtain the 

information, except where recourse to such means would give rise to 

disproportionate difficulty; or 

(c) where the disclosure of the information requested 

would be contrary to the public policy of the requested Party. 

2. This Agreement shall not impose upon a Party any 

obligation: 

(a) to provide information that under the laws of the 

requested Party is (i) subject to legal privilege or (ii) contains any 

trade, business, industrial, commercial or professional secret, or trade 

process, provided that information described in paragraph 4(a) of 

Article 5 of this Agreement shall not by reason of that fact alone be 

treated as such a secret or trade process; or 

(b) to carry out administrative measures at variance 

with its laws and administrative practices, provided that nothing in this 

subparagraph shall affect the obligations of a Party under paragraph 

4 of Article 5 of this Agreement. 

For purposes of paragraph 2(a)(i), the term “information subject to 

legal privilege” means information that would reveal confidential 

communications between a client and an attorney, where such 

communications are made for the purpose of seeking or providing 

legal advice or for the purpose of use in existing or contemplated 

legal proceedings. 

3. A request for information shall not be refused on the 

ground that the tax liability giving rise to the request is disputed by the 

taxpayer. 

4. The requested Party may decline a request for 

information if the information is requested by the requesting Party to 

administer or enforce a provision of the tax law of the requesting 

Party, or any requirement connected therewith, which discriminates 

against a national of the requested Party as compared with a national 

of the requesting Party in the same circumstances. A provision of tax 

law, or connected requirement, will be considered to be 
 

 

 

8
 

discriminatory against a national of the requested Party if it is more 

burdensome with respect to a national of the requested Party than 

with respect to a national of the requesting Party in the same 

circumstances. For purposes of the preceding sentence, a national of 

the requesting Party who is subject to tax on worldwide income is not 

in the same circumstances as a national of the requested Party who 

is not subject to tax on worldwide income. The provisions of this 

paragraph shall not be construed to prevent the exchange of 

information with respect to taxes imposed by the Parties on branch 

profits or on the premium income of foreign insurers. 

5. The requested Party shall not be required to obtain and 

provide information which the requesting Party would be unable to 

obtain in similar circumstances under its own laws for the purpose of 

the administration/enforcement of its own tax laws or in response to a 

valid request from the requested Party under this Agreement. 

6. The statute of limitations of the requesting Party 

pertaining to the taxes described in paragraph 1 of Article 3 of this 

Agreement shall govern a request for information. The expiration of a 

statute of limitations for taxes of the requested Party shall not 

preclude the requested Party from obtaining and providing the 

requested information. 

ARTICLE 7 

CONFIDENTIALITY 

Any information received by the requesting Party under this 

Agreement shall be treated as confidential and may be disclosed only 

to persons or authorities (including courts and administrative bodies) 

in the jurisdiction of the requesting Party concerned with the 

assessment or collection of, the enforcement or prosecution in 

respect of, or the determination of appeals in relation to, the taxes 

covered by this Agreement, or to supervisory bodies, and only to the 

extent necessary for those persons, authorities or supervisory bodies 

to perform their respective responsibilities. Such persons or 

authorities shall use such information only for such purposes. They 

may disclose the information in public court proceedings or in judicial 

decisions. Information received by the requested Party in conjunction 

with a request for assistance under this Agreement shall likewise be 

treated as confidential in the requested Party. The information shall 

not be disclosed to any other person, entity, or authority, or used for 

any purpose other than for the purposes stated in Article 1, except in 

cases where the requested Party provides prior, written consent that 

the information may also be used for purposes allowed under the 

provisions of the existing Treaty on Mutual Legal Assistance in 

Criminal Matters between the Parties, signed on April 11, 1991, as it 

may be amended. In no event shall information provided under this 

Agreement be disclosed to another country without the prior express 
 

9
 

written consent of the competent authority of the Party providing the 

information. 

ARTICLE 8 

COSTS
 

Unless the competent authorities of the Parties otherwise 

agree, ordinary costs incurred in providing assistance shall be borne 

by the requested Party and extraordinary costs incurred in providing 

assistance shall be borne by the requesting Party. 

ARTICLE 9 

MUTUAL AGREEMENT PROCEDURE
 

1. Where difficulties or doubts arise between the Parties 

regarding the implementation or interpretation of this Agreement, the 

respective competent authorities shall use their best efforts to resolve 

the matter by mutual agreement. 

2. The competent authorities may adopt and implement 

procedures to facilitate the implementation of this Agreement, 

including such additional forms for the exchange of information as 

shall promote the most effective use of the information. 

ARTICLE 10 

MUTUAL ASSISTANCE PROCEDURE 

If both competent authorities of the Parties consider it 

appropriate to do so they may agree to exchange technical knowhow, develop new audit techniques, identify new areas of noncompliance, and jointly study non-compliance areas. 

ARTICLE 11 

ENTRY INTO FORCE
 

The Parties shall notify each other when their necessary 

internal procedures for entry into force have been completed. This 

Agreement shall enter into force on the date of the later of such 

notifications. Upon entry into force, it shall have effect for requests 

made on or after the date of entry into force, with regard to taxable 

periods beginning on or after three years prior to the signature of this 

Agreement, to which the matter relates. 
 

 

10 

ARTICLE 12 

TERMINATION
 

1. This Agreement shall remain in force until terminated by 

either Party. 

2. Either Party may terminate this Agreement by giving 

notice of termination in writing to the other Party. Such termination 

shall become effective on the first day of the month following the 

expiration of a period of three months after the date of the notice of 

termination. 

3. If a Party terminates this Agreement, notwithstanding 

such terminations, both Parties shall remain bound by the provisions 

of Article 7 of this Agreement with respect to any information obtained 

under this Agreement. 

IN WITNESS WHEREOF the undersigned being duly authorized in 

that behalf by the respective Parties, have signed the Agreement. 

DONE AT Washington, in duplicate, in the English and Spanish 

languages, each text being equally authentic, this 30th day of 

November, 2010. 

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF 

THE UNITED STATES OF THE REPUBLIC OF PANAMA 

AMERICA