On 9th October 2026, EU finance ministers removed Panama from the EU list of non-cooperative jurisdictions for tax purposes — the “tax blacklist” — where it had sat since February 2020. That’s real, positive news. But the accurate way to say it is that Panama is off the blacklist and onto the EU’s Annex II monitoring list, not that it has been cleared of every EU list. The distinction matters, and most of the coverage you’ll read skips it.
It is general information and reflects my own experience and opinion; it is not advice.
What actually happened
The EU keeps two related lists. Annex I is the blacklist — jurisdictions the EU considers non-cooperative on tax, and against which member states can apply “defensive” tax measures. Annex II is a monitoring list — places that have made the right commitments but haven’t yet fully met the standards, kept under review while they finish the job.
On 9th October 2026, the Council moved Panama from Annex I to Annex II. It did so because Panama reformed the rules on how it exempts foreign-source income — the specific thing the EU had flagged — and because the OECD’s Global Forum has granted Panama a fresh review of how it exchanges tax information. Vietnam was removed at the same meeting. Eight jurisdictions remain on the blacklist: American Samoa, Anguilla, Guam, Palau, Russia, Turks and Caicos, the US Virgin Islands and Vanuatu. The next update is expected in February 2027.
So Panama will stay on the Annex II monitoring list until that Global Forum review is complete. It is a meaningful step up, not a final all-clear.
What it changes
Being on the blacklist gave EU countries a basis to apply defensive tax measures against Panama. Removal takes that basis away. In practice, member states update their own national rules on their own timetables, so the real-world effect arrives gradually rather than overnight.
The most immediate change is perception. The blacklist label carried a stigma that coloured how some investors, banks and businesses viewed Panama. That label is gone — and for anyone weighing Panama as a place to hold capital, bank and invest, that removes a long-standing question mark.
It’s worth putting alongside two earlier milestones: Panama left the FATF grey list in 2023 and the EU’s anti-money-laundering high-risk list in 2025. Three separate lists, measuring different things, all now pointing the same way. The direction of travel for Panama’s international standing is clearly positive.
What it does not change
Here’s where honesty matters, because this is where the headlines overreach.
It is a tax-cooperation decision, not an immigration one. It does not change Panama’s residency routes — the Qualified Investor Visa or any other — or their requirements. If you were considering Panama residency, the programme is exactly as it was the day before.
It does not oblige any bank to do anything. Banks still run their own source-of-funds and compliance checks, and can still ask for proof of income, contracts and tax records. Read the removal as a positive signal, not a promise of easier banking. The UK, outside the EU, applies its own rules.
It doesn’t rewrite your personal tax position. How Panama’s territorial system, and the reformed foreign-income rules, apply to you still depends entirely on your circumstances — your tax residence, whether you hold a Panamanian company, and your home country’s own rules. For US citizens, nothing here touches US worldwide taxation, FATCA or PFIC considerations — the same points covered in the guide for Americans. This is a question for a cross-border tax specialist, not a headline.
Why it matters for a Plan B — for Europeans and Americans alike
A good second residency is only half of a Plan B. The other half is being able to use the country — to bank, invest and move legitimate money without a cloud over the jurisdiction. For years, the EU blacklist was a small but real cloud over Panama. Its removal helps the second half of the equation.
For Europeans, it lowers a reputational and compliance barrier to holding capital in a stable, dollar-based jurisdiction outside the EU — a genuine non-EU Plan B and dollar base. (Your own country’s rules on foreign income and controlled companies still apply, so take local advice.)
For Americans, it adds to the case for Panama as a credible, de-risked second base close to home: off the FATF grey list, off the EU AML list, and now off the EU tax blacklist, in a dollar economy with territorial tax. (US tax obligations are unchanged — that follows your passport, not your residency.)
For both, the honest summary is the same: this strengthens Panama’s standing and removes a question mark — it doesn’t turn Panama into a no-questions-asked tax haven, and it doesn’t change the residency programme itself. If you’re weighing Panama as a second residency and base, the full picture — including where it fits against Portugal for Europe — is what I cover in my Panama Golden Visa guide and my free webinar.
