Panama’s move to Annex II marks progress in tax cooperation, with an information exchange review still pending.
Panama is no longer on the European Union’s tax blacklist following the Council’s October 9, 2026 announcement. The country has moved from Annex I—the EU list of non-cooperative jurisdictions for tax purposes—to Annex II.
For international businesses and advisers working with Panamanian entities, the key distinction is that removal from the blacklist does not end the review process.
Why Did the EU Remove Panama from Its Tax Blacklist?
The Council’s official announcement identifies two developments: reform of Panama’s foreign-source income exemption regime and approval of a new OECD Global Forum review of tax information exchange on request.
Panama will remain in Annex II pending that review.
For the domestic regulatory context, our analysis of Panama’s economic substance framework under Law 526 and Executive Decree 32 of 2026 explains the requirements relevant to affected entities.
Is Panama Still on an EU Tax List?
Yes. Panama has left Annex I but remains in Annex II, which records cooperation and commitments toward agreed tax governance standards.
| Question | October 2026 position |
| Is Panama on the EU tax blacklist? | It has been removed from Annex I. |
| Is Panama still under review? | Yes, through Annex II. |
| What remains pending? | A new review of tax information exchange on request. |
Why the Announcement Matters for International Business
Panama’s Ministry of Economy and Finance described the decision as a development that strengthens international confidence and improves conditions for investment. It attributed the result to technical work, diplomatic efforts and private-sector support.
For businesses, the practical question is how the updated status interacts with the rules governing their transactions. Where a tax provision, contractual clause or internal risk policy refers to the EU list, its wording and applicable law should be checked before drawing conclusions.
An international tax review can help distinguish the significance of the announcement from its consequences for a particular company or investment.
What Should Groups with Panamanian Entities Review?
The announcement provides a useful point to reassess existing arrangements and planned transactions. The review should reflect each entity’s activities and the jurisdictions involved.
Cross-Border Transactions and Tax Exposure
Identify whether the treatment of payments, investments or intercompany transactions depends on a jurisdiction’s listing status. Review any relevant provisions with advisers in the countries concerned.
Our strategic tax advisory for businesses supports the assessment of these arrangements.
Corporate Structures and Economic Substance
Assess the role of each Panamanian entity within the group and the requirements applicable to its activities. For changes to ownership arrangements, governance or group organization, our corporate and business law team can coordinate the legal analysis.
Compliance Policies and Supporting Records
Check whether internal policies, contracts or due diligence files contain references to Panama’s previous classification.
This can form part of a broader regulatory compliance review, supported by tax management and compliance services.
Frequently Asked Questions About Panama’s EU Tax Status
Any effect depends on the relevant jurisdiction’s legislation and the circumstances of the transaction. Businesses should obtain an assessment before changing their tax treatment.
Companies should continue assessing the domestic requirements applicable to them. The EU classification should be considered separately from their compliance obligations in Panama.
Treaty eligibility requires its own assessment. Tax residency and other conditions remain relevant, as explained in our guide to Panama tax residency and double tax treaties.
Restructuring requires a business-specific analysis. The appropriate decision depends on the entity’s purpose, income, operations and applicable legal requirements.
Businesses should continue reviewing their filing, payment and reporting obligations with support from qualified advisers. Our domestic tax services address these matters.
Assess the Impact on Your Panama Structure
At LAC Legal, together with LAC TAX, we assist international groups, investors and foreign advisers with the legal and tax assessment of Panamanian entities.
If your business uses a Panama structure, contact our team to review the implications of the updated EU classification alongside your corporate and compliance requirements.