Panama Leaves the EU Tax Blacklist and Moves to the Grey List

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On 9 October 2026, EU finance ministers meeting at ECOFIN removed Panama from Annex I of the EU list of non-cooperative jurisdictions for tax purposes. Panama had been on that list since February 2020.

Panama now is in Annex II, the “grey list” of cooperative jurisdictions with commitments still open. For both, the open item is the same: the OECD Global Forum has to complete a new review of how they exchange tax information on request.

What Panama changed

The EU’s main objection was Panama’s foreign-source income exemption, which let companies receive foreign passive income tax-free with no real presence in the country. Panama adopted Law No. 526 of 28 May 2026. Starting from the 2027 fiscal year, a Panamanian entity that belongs to a multinational group and earns foreign-source passive income (such as dividends, interest, royalties, capital gains or rents) must show economic substance in Panama and confirm it on the annual basis, or apply income tax at the rate 15%.

Most standalone Panamanian companies and foundations owned by individuals, and not part of a multinational group, fall outside the new rules.

The wider list

Annex I now has eight jurisdictions: American Samoa, Anguilla, Guam, Palau, Russia, the Turks and Caicos Islands, the US Virgin Islands and Vanuatu. Annex II has ten, including the British Virgin Islands. Belize left Annex II after a positive Global Forum rating.

What this means in practice

Delisting removes the reputational weight of the blacklist and should ease some of the defensive measures EU member states apply to blacklisted jurisdictions. Panama remains under monitoring, and the EU reviews the list twice a year.

If you have a Panamanian company or foundation and want to check whether Law 526 reaches it, contact Astra Trust.

This article is general information, not legal or tax advice.