Panama has agreed to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which the Indian agencies believe will help them expedite investigations into the “Panama papers” recently made public by the International Consortium of Investigative Journalists.

Benefit to India
India is among the 98 countries and jurisdictions that have already joined the Convention. “It is a positive development and in due course, will help the Convention participants like India exchange information on tax matters with Panama more swiftly,” said a government official.

History of the treaty
It was developed jointly by the OECD and the Council of Europe in 1988 and amended in 2010, in response to the call by the G-20 to align it to the international standard on exchange of information and to open it to all countries, “thus ensuring that developing countries could benefit from the new transparent environment.” The Convention also represents a wide range of countries, including all G20, BRIICS and OECD countries, financial centres and several developing countries.

Status of Panama under Treaty
It is learnt that though Panama has decided to sign the Convention following an analysis of international expectations and consultations with the private sector, its commitment for automatic exchange of information would be only towards those countries with which it signs bilateral agreements.