Panama Approves Israeli, UAE Double Tax Pacts
Monday, February 11, 2013
Panama's National Assembly has approved two new double tax conventions signed
with Israel, and with the United Arab Emirates.
The agreement signed with Israel on November 8, 2012, includes a protocol that
seeks to enhance provisions included in the main agreement for the exchange of tax
information in line with the Organization for Economic Cooperation and Development's
In general, the agreement caps the maximum withholding tax rates applicable to cross-border income
received in the form of dividends, interest and royalties at 15%. A specific
regime is provided for income received from a real estate investment trust, and dividends that are
received by a pension scheme may be entitled to a reduced 5% rate. The agreement
contains anti-abuse provisions limiting these reduced rates to the beneficial owner of
that income, to prevent tax treaty shopping.
The second agreement, signed with the United Arab Emirates on October 13, 2012,
also includes provisions to facilitate tax information sharing.