The U.S. Government and the Government of the Republic of Panama have signed an intergovernmental agreement to improve international tax compliance in accordance with the US Foreign Account Tax Compliance Act (FATCA). This agreement builds upon an older agreement – the Exchange of Information Relating to Taxes (IIEA) that has been in place since November of 2010. The full details can be found here.
Panama has been in the news quite a bit lately, due to the release of the so-called “Panama Papers.” The Panama Papers are an unpredecedented leak of over 11.5 million files from the database of the world’s fourth largest offshore law firm, Mossack Fonseca. The records were obtained from an anynonymous source by the German newspaper Suddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists. The release of these documents has brought massive scrutiny to the abuse and illegal activities occuring in offshore tax havens around the world. As a result, even those with completely legal offshore activities will presumably be subject to scrutiny in the near future. If you have offshore accounts, it would be wise to insure that all reporting and filing requirements required by the United States Treasury are being completed in an accurate and timely manner.