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Panama is off the EU tax blacklist, but not off the radar

EU finance ministers moved Panama to the EU's list of cooperative jurisdictions that still have commitments to meet.

Updated 9 October 2026, 13:30 Panama time

Panama is no longer on the European Union's list of non-cooperative jurisdictions for tax purposes, often called the tax blacklist. EU finance ministers adopted the revised list at the Economic and Financial Affairs Council (Ecofin) in Luxembourg on 9 October. In the conclusions they approved, Panama no longer appears in Annex I, the blacklist itself. It now appears in Annex II, the Council's "state of play" of cooperative jurisdictions that still have commitments to meet, often called the grey list (Council conclusions).

Viet Nam was also moved from the blacklist to Annex II. The blacklist now has eight names: American Samoa, Anguilla, Guam, Palau, the Russian Federation, the Turks and Caicos Islands, the US Virgin Islands and Vanuatu (Council conclusions).

What changed

In February, the Council's list said Panama "has a harmful foreign-source income exemption regime and has not resolved this issue yet" (Council conclusions, February 2026). That line is gone from the new list. Tax advisers at KPMG say it was removed after Panama reformed that regime in line with EU guidance (KPMG). La Prensa reports the reform came through the economic substance law, which takes effect in January 2027 (La Prensa).

What is still pending

Panama is not fully clear. In Annex II, under exchange of tax information on request, the Council lists Panama among the jurisdictions "waiting for an in-depth review by the Global Forum", the OECD-hosted body that rates how well countries share tax information with each other (Council conclusions). Montenegro and Viet Nam are in the same position.

The Council text sets no date for Panama's review. Ministry of Economy and Finance (MEF) spokespeople told La Prensa that Panama has formally asked the Global Forum for an on-site review, so it can be assessed by the first half of 2027 at the latest (La Prensa). The EU reviews its list twice a year, and the next update is expected in February 2027 (KPMG). Leaving Annex II will depend on the outcome of the review, not just on the calendar (La Prensa).

Advisers also note the change takes legal effect when the revised annexes are published in the EU's Official Journal (KPMG).

What the government says

The MEF posted on X that "Panamá sale de la lista negra de la Unión Europea y recupera la confianza del mundo", promising more investment, credibility and jobs (MEF). President José Raúl Mulino reposted it and, in a statement reported by TVN, called the result a "gran victoria" that opens the door to new investment (TVN). Economy Minister Felipe Chapman said six years on the list hurt Panama's reputation, made business harder and left the country competing at a disadvantage for investment (La Prensa, Telemetro). These are the government's own expectations, not effects the EU has set out.

How Panama got here

Panama had been on the EU blacklist since February 2020 (EFE, La Prensa).

What it means for expats

Do not expect your bank to change anything overnight. The blacklist matters mostly for how EU countries treat payments and structures linked to Panama. Listed jurisdictions can face defensive measures in EU member states, such as denied tax deductions, tighter controlled-company rules, higher withholding tax and extra reporting under the EU's DAC6 disclosure rules (KPMG). Coming off Annex I should ease those over time, but each EU country applies its own measures and some use their own national lists on their own timelines (KPMG).

  • Banking and KYC: European banks and brokers still run their own risk checks. Expect the same source-of-funds and tax-residency paperwork for now. If an EU bank has refused or questioned an account because of Panama's listing, it may be worth asking again once the change is published in the Official Journal.
  • Companies and foundations: if you own a Panamanian company or private interest foundation and have links to an EU country, ask your tax adviser whether the delisting changes anything in that country, and from when. Grey-list status still carries some reporting effects, for example in EU public country-by-country reporting rules for large groups (KPMG).
  • Other lists: this is the EU tax list only. La Prensa notes the decision does not automatically take Panama off other monitoring lists (La Prensa). It does not change Panama's visa or residency rules.
  • Investment and reputation: the government expects more European investment and an easier time for business (MEF, TVN). That is a hope, not a promise in the Council text.

Sources

  • Council of the EU - Conclusions on the revised EU list, Panama absent from Annex I and listed in Annex II as waiting for a Global Forum in-depth review - 9 Oct 2026
  • Council of the EU, published in the EU Official Journal - February 2026 list entry on Panama's harmful foreign-source income exemption regime - 6 Mar 2026
  • KPMG EU Tax Centre - Panama moved to Annex II after foreign-source income reform, effect from Official Journal publication, next update February 2027, defensive measures and DAC6 - 9 Oct 2026
  • La Prensa - What Panama still needs: Global Forum review, MEF request for an on-site review by early 2027, Chapman reaction - 9 Oct 2026
  • TVN - Mulino and Chapman statements on the EU decision - 9 Oct 2026
  • Telemetro - Chapman says six years on the list hurt reputation and investment - 9 Oct 2026
  • EFE - EU removes Panama and Viet Nam from the blacklist, Panama listed since February 2020 - 9 Oct 2026
  • MEF on X - "Panamá sale de la lista negra de la Unión Europea", reposted by President Mulino - 9 Oct 2026