Published on Mar 24, 2024

Historically, invoices have been a key element to keep control of commercial operations, both for the tax authorities in each country and for the merchants and/or consumers of a product or service. In this changing and globalized world, it is almost impossible for technology not to have an impact in all fields of daily life, and, in terms of invoicing, Panama does not escape from this reality.

Electronic invoices are fiscal, digital, and legal documents that support commercial transactions between sellers and buyers. It is an electronically signed document, whereby the authenticity, integrity and veracity of its content can be guaranteed.

By means of Law 256 of November 26, 2021, which modifies Law 76 of 1976 on tax measures, an era of fiscal innovation was declared in Panama, including the obligation to issue electronic fiscal invoices for specific figures, the formalities that the invoices must have, the list of exempted persons and the penalties in case of non-compliance.

With respect to the previous legislation, the number of regulated entities has increased, and the number of exempted entities has decreased, as follows:

New subjects:

  • Land, air or sea public passenger transportation services.
  • Operations and services performed by banks, financial institutions, companies engaged in financial leasing, investment funds, fiduciaries, cooperatives, savings funds, pension funds, retirement and social welfare funds and savings and loan institutions.
  • Services provided by liberal professionals (lawyers, architects, engineers, doctors, among others) exercised independently or through civil societies.
  • Real estate leasing activities.

Some of the exempted subjects:

  • Agricultural activities with gross annual taxable income if less than B/.350,000.00.
  • Selective transportation services.
  • Non-profit associations duly authorized to receive deductible donations.
  • Activities of associations of co-owners related to the collection of maintenance fees, in compliance with the horizontal property regime.

The penalties for non-compliance with this regulation range from B/. 500.00 to B/. 25,000.00, depending on the degree of the offense, and are classified as follows:

  • Minor offenses: B/.500.00 to B/.1,000.00
  • Serious offenses: B/.5,000.00 to B/.10,000.00
  • Recidivism: B/.10,000.00 to B/.25,000.00 and temporary closing of the establishment might be ordered.

On the other hand, consumers may also be sanctioned when they leave the establishment without the invoice, whether physical or digital. Fines may be of B/.1.00 or 7% of the value not invoiced.

Up-to-date regulation allows taxpayers to use other means of invoicing different from the electronic invoice, in the event that the issuer of the invoices finds it difficult to connect to the internet, or that due to the nature or volume of the activities carried out, it does not use fiscal equipment.

Currently there are two models for the issuance of electronic invoices. The first is the free factor, intended for small companies. The second is invoicing through a Qualified Authorized Provider (PAC), adjusted to regulator parameters.

It is important to highlight that these invoices are legally valid as proof of payment in case of any controversy; to support deductible expenses when filing income tax returns; and they comply with all legal requirements to be considered as a negotiable instrument.

The timetable for the adoption of mandatory electronic invoicing system is being established in a staggered manner by the regulator, it is expected that by the first quarter of 2024 there will be a deadline duly set for the implementation of this commitment for liberal professionals.

María Paula Orsini. - Associate, Panama

The information provided by ARIAS® is presented for informational purposes only. This information is not legal advice and is not intended to create, and does not constitute, an attorney-client relationship. Readers should not act upon this information without seeking advice from professional advisers.