Panama’s fiscalization system-general overview

Panama operates a hybrid fiscalization system based on authorized fiscal devices and electronic invoicing. New taxpayers must use electronic invoicing, while eligible existing businesses may continue using fiscal devices. Both methods are regulated by the tax authority, DGI.

Panama has established a hybrid fiscalization system that combines traditional hardware-based fiscalization with electronic invoicing. The system is administered by the Dirección General de Ingresos (DGI), the country's tax authority, which supervises the issuance of fiscal documents, compliance requirements and reporting of sales information.

The general rule is that businesses must issue an invoice or equivalent fiscal document for sales of goods and services, regardless of the payment method. The obligation applies to retailers, restaurants, hotels, service providers, e-commerce businesses and other commercial activities, subject to specific legal exemptions.

Panama recognizes two main fiscalization methods: authorized fiscal equipment (Factura Fiscal) and the Panama Electronic Invoicing System (Sistema de Facturación Electrónica de Panamá – SFEP). These represent two different ways of documenting transactions and providing fiscal information to the tax authority.

The first method is based on authorized fiscal devices, including fiscal cash registers and fiscal printers integrated with POS software. These devices record transactions, calculate applicable taxes, store fiscal information and produce fiscal receipts..

The second method is electronic invoicing through SFEP. Instead of requiring a traditional fiscal printer, businesses use software to generate electronic fiscal invoices according to DGI technical specifications.

The electronic invoice is created in XML format, digitally signed and processed through an authorized provider known as a Proveedor de Autorización Calificado (PAC), which validates the invoice and issues the required authorization.

An important distinction applies to businesses based on their registration date. Taxpayers newly registered from January 1, 2022, must generally use electronic invoicing. Businesses registered before that date may continue using authorized fiscal equipment where permitted or migrate to SFEP. The two methods are not generally intended to operate simultaneously as parallel invoicing methods for the same taxpayer.

The fiscalization framework is based on Law 76 of 1976 and subsequent amendments, particularly Law 256 of November 26, 2021. Additional requirements are established through Executive Decree No. 25 of June 27, 2022, Executive Decree No. 3 of January 20, 2023, and DGI resolutions and technical specifications.

Certain activities and taxpayers qualify for legal exemptions, including specified agricultural activities, street vendors, taxis and other regulated categories. These exemptions do not necessarily eliminate the obligation to document transactions using an authorized method.

For fiscal-device users, the device issues a fiscal receipt containing information such as the seller's identification, transaction date, receipt number, products or services, quantities, prices, applicable taxes and total amount.

For SFEP users, the principal fiscal document is the electronic invoice, or Factura Electrónica. Its human-readable representation is known as the CAFE (Comprobante Auxiliar de Factura Electrónica), which may be delivered electronically or printed.

Implementation Impact and What Businesses Should Do

Panama's framework requires businesses to maintain a compliant fiscalization solution appropriate to their registration status and operations.

Retailers and POS providers should verify which fiscalization model applies, ensure that all sales and adjustments are correctly documented, and confirm that tax calculations, reporting, archiving and store procedures meet DGI requirements.

Businesses using fiscal devices should pay particular attention to approved hardware, daily Z-report transmission and maintenance obligations. Those using SFEP should verify their electronic invoicing integration, authorization process, digital signature and customer-document delivery.

The main priority is to ensure that every transaction is properly documented, transmitted where required and available for tax inspection.

The findings presented above are based on comprehensive consultant research and verified through direct correspondence with Tax Authority of Panama. 

Nikolina Basić Senior Legal Consultant Linkedin profile