Israel signed a tax treaty with Panama on 8 November 2012. The treaty contains an Article on the exchange of information between the tax authorities of the two states, which is based on the OECD’s model treaty. Panama is currently aiming to implement internationally agreed standards on the exchange of information.
Withholding tax rates of 15% apply to interest, dividends and royalties. A company engaged in a construction project in the other state will have a permanent establishment and be subject to tax there only if the project continues for over 9 months. The treaty will enter into force after completion of the ratification proceedings in both countries.
