The Organization Economic Co-operation and Development (OECD), declares as “Non-harmful” the Panamanian Ship Registry, which is the actual leader registry with more than 8 thousand flagged ships, representing approximately the 18% of the maritime world fleet, during the 47th Session of the Forum on Harmful Tax Practices (FHTP), held at its headquarters in Paris (France).
The General Director of Merchant Marine (DGMM), of the Panama Maritime Authority (AMP), Fernando Solórzano, represented the institution in this important Forum, and he was accompanied by the representative of the Ministry of Economy and Finances, (Tatiana Aleman), Consultant of the Office of the Action Plan against the Base Erosion and Profit Shifting (BEPS) following the sessions of the beforementioned international organism. This meeting follows the one held on July, where the self-assessment of the Panamanian shipping regime was preliminarily delivered.
The “Non-harmful” term, refers to the fact that “it does not represent a risk”, neither is “detrimental” to the tax base of other countries, appointed Solórzano, who added that the International Ship Registry of Panama, widely illustrated the OECD by means of a technical evaluation that the Panamanian ship regime complies with this organization's regulations.
Within this event, a previous assessment of the Panamanian ship regime was held, and it was sustained by Solórzano, according to the fast track process requested by the European Union (EU) on the 45th session of the Forum, held on May of 2017.
The assessment sustained the following issues:
Tax Dispositions referring to the exemptions of the Income Tax in matters of Panama’s maritime transportation.
Accounting Control Registries of the legal corporations devoted to the shipping activity.
Transparency Measures and effective Exchange of information.
Substantial Activities, referring to the effective compliance of the maritime companies in its economic obligations, which should keep qualified manpower and effective operational expenses, corresponding to the generated activities. Panama justified this matter making a wide explanation about the different activities performed in the Panamanian maritime cluster, and above all the importance of the tax legal frame to boost the maritime activity in our country and the responsibilities of the shipping agents and the resident agents of the companies linked to the maritime sector.
This International Organization has positively assessed other ship registries as Hong Kong and Singapore. The regimes of Malta and Barbados where also reviewed at this Forum.
The Minister of Maritime Affairs of Panama, Jorge Barakat, shown himself pleased with the decision of this organism and expressed that “the decision of the OECD shows that the Panamanian International Ship Registry not only complies with the international maritime conventions; but also respects the tax regulatory frames at an international level, strengthening its position as an excellency registry and as the number one registry worldwide”.
On October 31st, 2016, Panama adhered as an associate member to the Inclusive Framework on the BEPS of the OCDE.