The European Union removed Panama from its list of non-cooperative tax jurisdictions on Friday, marking a significant shift in the country’s standing on Panama fiscal transparency. The decision, confirmed during a meeting of EU finance ministers in Luxembourg, moves Panama from Annex I, commonly known as the blacklist, to Annex II, which recognizes cooperating jurisdictions with pending commitments.
The announcement ends a six-year period during which Panama faced heightened scrutiny from European institutions. Vietnam was also removed from the blacklist in the same decision. The EU Council stated the update “reflects a positive trend in compliance with international standards of good tax governance.”
Panama Fiscal Transparency Commitments Remain Ongoing
Placement in Annex II does not mean full clearance. The EU considers Panama a cooperating jurisdiction, but one that still must address outstanding commitments
to transparency and good fiscal practices. The country entered the blacklist in 2020, while Vietnam had only been listed since February 2026.
The next evaluation falls to the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes. Panama received authorization to undergo a new review of its exchange of tax information upon request, a mechanism allowing fiscal authorities to access data for cross-border investigations. Until that assessment concludes, Panama stays in Annex II.
Government Response and Diplomatic Effort
President José Raúl Mulino framed the removal as a personal priority pursued since taking office.
“This is the result of a fight I began in the private sector, and led as president from day one. I did it working with a great team and with support from all sectors, whom I thank for their participation” [Translated from Spanish]
The Panamanian government credited coordinated work between the Ministry of Economy and Finance, diplomatic channels, and private sector engagement.
“To achieve this we had to travel for face-to-face meetings, demand action in forums, and above all recover the confidence of the international community” [Translated from Spanish]
Mulino added that the decision opens doors to new investment and improves competitiveness for Panamanians.
Economic Implications for Investment and Employment
The executive branch emphasized that leaving the blacklist strengthens international confidence and improves conditions for attracting investment. Officials linked the change to broader economic activity and job creation potential. The government also stressed that Panama demonstrated capacity to meet international commitments while maintaining competitiveness as a financial and economic center.
The removal signals reduced reputational risk for financial institutions operating in Panama. Banks and multinational companies often face additional compliance costs when dealing with blacklisted jurisdictions. Moving to Annex II may ease some of those burdens, though continued monitoring remains in place pending the OECD review.
The decision carries particular weight for Panama’s service-based economy, which relies heavily on legal, financial, and logistics sectors. International clients frequently cite tax transparency ratings when choosing corporate domiciles. The EU’s action effectively acknowledges progress on information exchange standards while keeping pressure for full compliance.