Panama removed from the EU blacklist: what changed on 9 October 2026

On 9 October 2026 the Council of the European Union removed Panama from the list of non-cooperative jurisdictions for tax purposes and moved it to the grey list. What took Panama off the list, what Law 526 requires and how European Union countries lift their defensive measures.

In detail

Panama removed from the EU blacklist: the key facts

On 9 October 2026 the Council of the European Union, meeting as finance ministers in Luxembourg, removed Panama from the list of non-cooperative jurisdictions for tax purposes. Vietnam left the list at the same time. Both countries moved to the grey list, the European Union list of cooperating jurisdictions that still have commitments to meet.

For owners of Panama companies this is the biggest news in six years: the country had been on the blacklist since February 2020. The decision does not change Panama's taxes. Foreign income is still not taxed, and the annual company fee stays at $300. What changes are the rules for payments from the European Union to Panama: European Union countries lift the defensive measures linked to the list under their own rules.

Checked on 16 October 2026.

8 jurisdictions remain on the European Union blacklist: American Samoa, Anguilla, Guam, Palau, Russia, the Turks and Caicos Islands, the US Virgin Islands and Vanuatu.

Why Panama was on the blacklist and what took it off

In February 2020 the European Union listed Panama over its rating for exchanging tax information at the request of other countries. In October 2021 a second concern was added: foreign income was exempt from tax even for companies that did nothing in Panama itself.

A reform resolved the second concern. Law 526 of 28 May 2026 introduced economic substance rules, and Executive Decree 32 of 2 September 2026 set out the minimum. The European Union found the requirement met and removed Panama from the main list.

What Law 526 requires

• Who it covers. Panamanian companies that belong to a multinational group, meaning two or more related companies in different countries, and receive dividends, interest, royalties, capital gains or income from property from abroad.
• The condition for the zero rate. A real presence in Panama: paid qualified employees, strategic decisions taken in the country, and expenses proportionate to the income.
• No presence. 15% on net passive income from abroad.
• From when. From the 2027 tax period.

Trading and service companies with clients abroad are outside the law: their foreign profit is still not taxed.

How Law 526 measures presence and which expenses count as proportionate is covered on the page taxes in Panama.

The grey list: a review of tax information exchange in 2027

On the grey list Panama has one commitment: an in-depth review of how it exchanges tax information on request. The review is run by the Global Forum on Transparency and Exchange of Information for Tax Purposes. Panama applied on 30 April 2026, and the review is planned for the first quarter of 2027. Until its results Panama stays on the grey list.

The grey list records commitments, not measures: the European Union guidance on defensive measures applies to the jurisdictions on the main list. 10 jurisdictions are on the grey list now:

• the British Virgin Islands;
• Brunei, Eswatini, Greenland, Jordan;
• Montenegro, Morocco, Panama, Turkey and Vietnam.

The automatic exchange of account data runs separately from the European Union list. Decree 21 of 27 May 2026 approved a list of 91 jurisdictions for which Panamanian banks collect data for 2025. Which countries stay outside the exchange is covered in the article accounts outside the Common Reporting Standard.

How European Union countries lift defensive measures

While Panama was on the blacklist, every European Union country applied at least one of four defensive measures to dealings with it:

• no deduction of expenses for payments to Panama;
• taxing the profit of a controlled Panamanian company in the hands of its owner;
• a higher withholding tax;
• no exemption for dividends from Panama.

The European Union recommends lifting such measures once the reason for listing is resolved or as soon as possible after that. Each country does it under its own procedure:

• Germany will accept the deduction of expenses on deals with Panamanian partners once it updates its regulation against tax havens. Until then the measures apply.
• Other European Union countries update their rules on their own schedule.

Before a large payment from the European Union to Panama, check the rules of your counterparty's country. A Murblz manager will check for your case which measures apply in your partner's country.

What has not changed: Panama taxes in 2026

Panama taxes only income earned on its territory (Article 694 of the Tax Code). A company pays 25% on profit from Panama, and foreign profit is not taxed. From 2027 there is one exception: 15% under Law 526 for companies of multinational groups with no presence in the country.

Panama has double tax treaties with 17 countries, including Spain, Portugal, France, Italy and the United Kingdom. The rates for every tax are collected on the page taxes in Panama.

National lists: the EU decision leaves them as they are

Some countries keep their own lists of low-tax jurisdictions, and these do not depend on the European Union list. Portugal keeps Panama on its list. Before a payment, check whether the counterparty's country has such a list and whether Panama is on it.

Who a Panama company suits after the removal

• Trading and service companies with clients abroad. 0% on foreign profit and a $300 annual fee. How to open one is covered on the page company formation in Panama. The account for such a company is on the page business accounts in Panama.
• Holdings with staff and decisions in Panama. With a real presence, foreign dividends and interest are still not taxed.
• Families who hold and pass on capital. A Panama private foundation separates assets from the founder's personal property.
• People who are moving. Residence options are collected on the page Panama: programs and statuses.

To compare Panama with other jurisdictions, see the section company registration.

We will help with your Panama company

Murblz works with partners licensed in Panama. Together we register companies and foundations, open accounts and prepare companies for Law 526. We check whether a company belongs to a multinational group, calculate its passive income and build a presence in the country where it is needed. For existing companies we check which measures in European Union countries still apply to your payments.

Start with a free consultation in the chat on the site: a manager will review your structure and tell you what has changed for it since 9 October. Details and the cost of support are with the manager. Get a free consultation.

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