On 24 January 2019, the tax authority of Panama signed the Multilateral Competent Agreement (MCAA) for the exchange of Country-by-Country (CbC) reports. The purpose of the CbC MCAA is to set forth rules and procedures as may be necessary for Competent Authorities of jurisdictions implementing BEPS Action 13 to automatically exchange CbC Reports prepared by the Reporting Entity of an MNE Group and filed on an annual basis with the tax authorities of the jurisdiction of tax residence of that entity with the tax authorities of all jurisdictions in which the MNE Group operates.
Panama will have to report to the Co-ordinating Body Secretariat to activate the bilateral exchange relationship under the MCAA CbCR: (i) a list of the jurisdictions with which Panama intends to exchange CbC reports; or (ii) a statement by which Panama will exchange CbC reports with all jurisdictions that list Panama as an exchange partner in their notifications Development of the domestic legal framework for CbC reporting is the next step for Panama.
