If a Panama company owner wants to be in full compliance, this article will be of much help. We analyze the essence of the digital invoice that’s mandatory by law in the Republic of Panama. Through this electronic invoice regime, the Panama corporate sector ensures that the country continues to be among the top corporate centers in the region and one of the most solid financial solutions in the world.
Having a compliant company in Panama through electronic invoice issuance
Panama is now migrating to managing accounting issues fully through software, i.e., the DGI’s website. The DGI is the “Dirección General Impositiva”, Spanish for “Tax General Directorate”. For a quick understanding of this entity’s function is that the DGI is to Panama like the IRS to the US.
Through the recent implementations, now providers can (and must) issue an electronic invoice for their every service/product. This is a mandatory measure.
If you want to have a compliant company in Panama, or simply provide services as a natural person, you have to get familiar with this digital invoice or electronic invoice tool. Issuers must be registered with the DGI and authenticate their signature through the Panama Public Registry. Once you’ve done this, you’ll have your own electronic signature under which you’ll issue all invoices.
The secret to the mandatory electronic invoice in Panama: two ways to issue your digital invoice
With online billing software you can charge clients and sometimes issue an invoice, however, what the DGI proposes has a much wider reach. E-invoicing companies and natural persons will be obliged to abide to the DGI digital system but will also benefit from a more regulated corporate scenery. To implement the new conditions, users have two separate approaches.
Send electronic invoice: free option
The free invoice issuer is available on the DGI’s website and can be accessed directly from there. Nonetheless, this option comes with its limitations. Only natural or legal persons whose yearly income is lower than 1 million or whose number of invoices doesn’t exceed 500 invoices a year can access the free alternative.
Send electronic invoice: issue your digital invoice through authorized providers
If a person can’t or won’t use the free issuer they can turn to the PACs. PAC stands for “Proveedor Autorizado Calificado”, Spanish for “Qualified authorized provider”. In this case, companies and natural persons must contact a PAC who will carry out the process and issue the invoice for them.
Note: If a company or person exceeds the 500 invoices a year but generates an income of up to 36,000 a year, they can issue the digital invoice through the free alternative on the DGI’s website.
Consequences of not complying with the digital invoice requirements
Failing to issue invoices properly and timely may result in fines or penalizations. The Mundo team highly recommends considering what the law stipulates about e-invoicing companies and natural persons.
Having a compliant company or personal business is a challenge, but things are simplified when one observes what the law stipulates and follows the regulations. All in all, the outcome is a business free of fines that operates within a solidly regulated environment.
Disclaimer: This article provides general information on digital invoice in Panama. However, the present article does not replace professional advice from a qualified specialist.
How can Mundo help you be in full compliance?
Having a compliant company is vital if one wants to avoid fines and unnecessary expenses. Moreover, it’s always important to hire a qualified professional. The Mundo team is formed by lawyers, agents, and experts based in different countries, and Panama is one of them. Our local team can help you choose the right solution for your online billing software and digital invoice needs in the country of the canal.
For starters, our experts will have an interview with you so that they can understand your case and the particular attention that your activity requires. If you want to be in full compliance, the Mundo team is here for you and will walk side by side with you the whole way. Start today and contact us!
