Panama Removed from EU Tax Blacklist After Six Years of Unsuccessful Attempts

PANAMA - In Brief 09 Oct 2026 by Marco Fernandez

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Panama was officially removed from the European Union’s list of non-cooperative jurisdictions for tax purposes on Friday, October 9, marking the end of more than six years on the bloc’s tax blacklist. The announcement was made early in the morning by Economy and Finance Minister Felipe Chapman, following a decision by the Council of the European Union. The decision acknowledges the progress in Panama’s efforts to align its tax framework with international standards, particularly through the adoption of the Economic Substance Law, which is set to take effect in January 2027. This legislation reforms Panama’s existing framework of tax exemptions for foreign companies, a key factor behind the country’s inclusion on the list in February 2020. Chapman described the removal as an important first step toward restoring Panama’s international credibility and strengthening its appeal to foreign investors. Panama has not yet secured a definitive exit from the EU’s tax monitoring framework. Its removal from Annex I, which identifies non-cooperative jurisdictions, and transfer to Annex II places the country among jurisdictions that have committed to implementing reforms or addressing outstanding requirements to meet international standards of tax governance. Panama’s remaining priority is to undergo a new assessment by the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes, particularly regarding compliance with international standards for the exchange of tax information. According to the Council’s announcement, Panama has been authorized to undergo this evaluation, the outcome of which will be critical to securing its removal from Annex II. The final ...