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Colombia and Panama to Settle Tax Dispute by End of the Year

Colombia and Panama to Settle Tax Dispute by End of the Year

Posted by Juan Gavasa on October 10, 2014

Brasil, que posee el 34 % del mercado digital latinoamericano, ha movilizado en la industria de los videojuegos unos 1.500 millones de dólares anuales, según los organizadores de la séptima edición de la feria.

Presidents Juan Carlos Varela (Panama) and Juan Manuel Santos (Colombia) indicated on Wednesday that their ministers will work to settle their countries' dispute by the end of the year. Colombia denounced Panama's failure to declare Colombian assets and money abroad.

Colombia had issued the Panamanian government a deadline for Tuesday to deliver. Panama failed to do so.

Panamanian Minister of Economy and Finance (MEF), Dulcidio de La Guardia and Colombian Minister of Finance and Public Credit Mauricio Cardenas, met in Washington yesterday during the Annual Meeting of the Boards of Governors of the IMF and World Bank. Both officials committed to finding a solution for this dispute by the end of the year. They made the announcement in a joint press conference.

“It’s not prohibited to have money in other countries, but it must be declared. What we want is to close the circle around the people hiding money in other countries,” the director of Colombia’s tax agency DIAN, Santiago Rojas, explained on Caracol Radio Wednesday morning.

Colombia claims that it has “adequate information from Panama” to apply national tax regulations, highlighted Rojas.

The decision may motivate Panama to sign an accord with Colombia rather than risk losing investment from businesses and individuals. In the event a tax is applied, Colombian assets in Panama will be taxed at a rate of 33 percent. If Panama signs the agreement, Colombians will pay 10 percent for their assets in the Central American country.

Colombian investments in Panama have more than quadrupled last year to US$3.2 billion, representing 41.8 percent of total foreign investments by Colombians in 2013, according to the country's central bank figures.

The reform would also sanction tax evaders for the first time and introduce prison sentences. Any Colombian citizen that fails to declare their foreign assets greater than eight billion pesos (US$3.9 million) could face four years of prison.

Colombia has also blacklisted Barbados, United Arab Emirates, The Isle of Man, Kuwait, Qatar, Cayman Islands, British Virgin Islands, Andorra, Bermuda, Guernsey, Liechtenstein and Cyprus.

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