EU removes Panama from tax haven blacklist

The European Union has removed Panama from its list of tax havens, marking a significant step in the country's efforts to increase transparency and cooperation with international tax authorities. This decision comes after Panama demonstrated progress in sharing tax information and reforming its harmful regime of exemptions for foreign-source income, according to the EU's statement.

Vietnam also received the same treatment following a series of reforms it undertook. Currently, there are eight jurisdictions on the EU's blacklist of non-cooperative tax havens, including American Samoa, Anguilla, Guam, Palau, Russia, Turks and Caicos Islands, US Virgin Islands, and Vanuatu. The list has been updated to reflect a positive trend in compliance with international tax governance standards.

The Panama Papers scandal rocked the world in 2016, exposing how wealthy individuals and corporations used offshore accounts to stash away billions in tax havens. The leak, featuring 11.5 million files from law firm Mossack Fonseca, prompted investigations and reforms worldwide. Panama was initially removed from the EU's list in 2018 but returned in 2020.

The recent decision by the EU to reinstate Panama's removal stemmed from a review by the OECD Global Forum, confirming Panama's compliance with international standards on tax information exchange and the reformation of its harmful foreign-source income exemption regime.