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Canada Hails TIEA With Panama As Key In Tax Evasion Fight

by Mike Godfrey, Tax-News.com, Washington

20 March 2013


The Canadian Government has said that its newly signed tax information exchange agreement (TIEA) with Panama supports its fight against international tax evasion.

The deal's signature was announced in Panama by Diane Ablonczy, Minister of State of Foreign Affairs (Americas and Consular Affairs). She said that it would help the Government "to build a more transparent, rules-based environment with one of Canada’s key trading partners in Central America."

Under the terms of the TIEA, tax authorities in both countries will be able to exchange information relevant to the administration and enforcement of their respective domestic tax laws. It is based on the international standard developed by the Organization for Economic Co-operation and Development (OECD). Canada's 2007 Budget legislation stipulated that all new treaties and revisions to existing treaties must include the OECD standard.

Panama is Canada’s third-largest merchandise-export market in Central America. Bilateral merchandise trade reached CAD213.6m (USD209.5m) last year, having grown by 62% since 2009.

Welcoming the news, Finance Minister Jim Flaherty said: "This agreement supports our fight against international tax evasion. Our Government remains committed to continuing to implement the international standard for the effective exchange of tax information."

The Agreement will enter into force once both sides have completed their domestic ratification processes.

Ablonczy also recently announced that the Free Trade Agreement (FTA) between the two countries is set to enter into force from April 1. From that date, more than 90% of tariffs on Canadian goods exported to Panama will be eliminated. This is expected to benefit the aerospace, pharmaceuticals, pulp and paper, and agriculture and agri-food sectors in particular.

The Canadian Government expects that the FTA will create a preferential and more predictable trade and investment environment, and thereby result in increased export and investment opportunities. Canadian suppliers will also be given preferred access to the government procurement market in Panama.

Canada is in ongoing trade negotiations with the EU, India, Japan, and the members of the Trans-Pacific Partnership.

TAGS: compliance | Finance | tax | investment | free trade agreement (FTA) | tax information exchange agreement (TIEA) | tax compliance | India | Uruguay | tax avoidance | law | tariffs | Organisation for Economic Co-operation and Development (OECD) | trade treaty | Liechtenstein | enforcement | food | agreements | legislation | Canada | trade | European Union (EU) | Japan | Panama | Europe

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