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Last updated at
February 4, 2026
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Book NowThe Republic of Panama’s Dirección General de Ingresos (DGI), under Law 256 of 2021 and relevant Executive Decrees and Resolutions including Executive Decree 766 of 2020 and Resolution 201-6299 of 2025, has rolled out a national Electronic Invoicing System, the Sistema de Factura Electrónica de Panamá (SFEP). The system makes structured e-invoicing mandatory or progressively mandatory for many taxpayers, changing how businesses issue, report, validate and store invoices across Panama.
The mandate requires taxpayers who exceed certain volume thresholds, invoices per month or annual revenue above defined limits, to issue invoices in a structured data format via a DGI-registered or DGI-authorized system, either the DGI’s free “facturador gratuito” or a certified external provider known as a PAC (Proveedor Autorizado Calificado). Invoices not issued in the required structured format and not validated by a PAC or the DGI do not qualify as legally valid electronic invoices under the regulation.
E-invoicing is designed to improve transparency, reduce tax evasion and automate record-keeping for both businesses and the DGI. This blog explains the requirements of the system in Panama, key deadlines, technical process, benefits and how providers like Flick Network help companies comply smoothly with the law.
E-invoicing in Panama refers to issuing, validating and storing invoices electronically in a structured data format (XML) via SFEP rather than relying on purely paper-based or ad-hoc digital formats. Each invoice must be generated by a certified system, either the free invoicing tool offered by the DGI or a DGI-authorized third-party certified system (PAC). The invoice must be digitally signed using a qualified electronic signature (Firma Electrónica Avanzada, FEA) backed by a certificate from a provider registered with the national electronic signature authority.
Once generated and signed, the invoice must be submitted to a PAC or via the DGI’s free tool, which validates and authorizes it, assigns the unique electronic invoice code CUFE (Código Único de Factura Electrónica), and returns a human-readable version, commonly called CAFE, that can be printed or sent to the customer.
Invoices that are merely PDF or scanned copies of paper invoices without XML structure, digital signature, PAC validation and the proper CUFE code do not qualify as compliant electronic invoices under Panamanian regulation.
After issuance, both the signed XML invoice and the CAFE (or equivalent human-readable version) must be stored in an electronic archive. Businesses typically retain these records for at least five years, in line with common audit and tax-record-keeping practice.
26 November 2021: Law 256 amends the legal framework and establishes SFEP as a valid invoicing method for those exempted from fiscal equipment.
Since 2021: Taxpayers exempt from fiscal equipment may opt into SFEP (voluntary adoption).
1 January 2022: New taxpayer registrations (new RUCs) must adopt SFEP if they wish to invoice electronically.
25 July 2025: DGI issued Resolution 201-6299 updating criteria for use of the free invoicing tool.
1 January 2026: Effective date after which only taxpayers with annual gross revenues up to B/. 36,000 and issuing no more than 100 documents per month may continue using the free invoicing tool. Taxpayers exceeding those thresholds must migrate to a certified PAC or an equivalent DGI-certified system.
Under current SFEP regulations, the following groups of taxpayers are subject to the e-invoicing mandate:
Taxpayers who are exempt from the requirement to use fiscal-printer equipment, and who sell goods or provide services in Panama under DGI registration.
New registrants (new RUCs) from 2022 onward that opt for electronic invoicing under SFEP.
Suppliers to government entities, including major contractors such as for the Autoridad del Canal de Panamá (ACP).
Independent professionals and other service providers (for example lawyers, accountants, architects), especially when they meet condition thresholds or operate under categories that SFEP mandates.
Businesses that exceed the thresholds set for the free invoicing tool, annual gross income above B/. 36,000 or more than 100 invoices per month. These must use a PAC or certified system from 1 January 2026.
Micro-businesses or small taxpayers with low revenue and invoice volume may continue using DGI’s free “facturador gratuito,” provided they remain within the threshold limits.
Invoice Format: Invoices must be issued in XML according to SFEP’s technical specification.
Digital Signature: The XML invoice must be signed with a qualified electronic signature (FEA), using a valid certificate issued by a DNFE-registered certification provider.
Submission and Validation: The invoice must be submitted through SFEP via a PAC or DGI’s free tool for validation and authorization, and only then does it become legally valid.
Delivery to Customer: Once authorized, a human-readable copy (CAFE) may be sent to the customer in PDF or other accepted digital format or even printed. The CAFE includes the CUFE code and optionally a QR code.
Archiving and Record-Keeping: Both the signed XML and the CAFE (or equivalent) must be stored electronically and remain accessible for audits. Industry practice recommends retention for at least five years.
Implementing e-invoicing under SFEP brings several advantages:
Efficiency: Automating invoice issuance and validation reduces manual paperwork and administrative burden.
Accuracy: Structured XML data and mandatory validations help avoid human errors, ensure uniformity in invoice data, correct tax calculations, and compliance with legal requirements.
Legal validity: Electronic invoices with PAC validation, CUFE and digital signature are legally equivalent to invoices issued via fiscal-printer or traditional paper invoices under the law.
Audit readiness and traceability: Digital archiving ensures invoices are retrievable for audits; each invoice has a unique identifier for easier reconciliation and verification.
Cost savings: Reduction of printing, physical storage and manual processes benefits small and medium enterprises.
Support for digital economy: Encourages digital record keeping, supports e-commerce and services, and enhances fiscal control and transparency nationwide.
Non-compliance with SFEP rules can carry risks:
Invalid Invoices: Invoices issued without XML structure, digital signature, PAC validation, or without CUFE may be considered invalid fiscal documents, affecting deductibility, cost recovery, or compliance under law.
Client/Buyer rejection: Clients, especially formal businesses or government entities, may refuse invoices that are non-compliant or lack valid CUFE.
Operational disruptions: If migration to a PAC or certified system is delayed or overlooked, the business may face billing disruption when thresholds are exceeded.
Audit and compliance risk: Without proper records (signed XML plus CAFE plus archive), invoices may not hold up under audit, which could trigger penalties or other legal consequences.
Assess your business volume: Review your annual gross revenue and monthly invoice volume to determine whether you qualify for the free invoicing tool or need a PAC before 1 January 2026.
Register with DGI: Ensure your RUC is active, economic-activity data is updated, and declare intention to use SFEP if you plan to invoice electronically.
Choose a Solution Provider: If your business exceeds thresholds or expects growth, contract a certified PAC or implement a DGI-certified invoicing/ERP system for structured e-invoicing.
Integrate and Test: Generate sample XML invoices, apply digital signature, submit to a PAC for validation, verify CUFE and CAFE generation, and test invoice delivery workflows (XML, PDF, email or other channel).
Staff Training: Train accounting, finance and billing teams on structured invoicing, digital signature process, issue and submission workflow, archiving, and customer delivery.
Set Up Archiving and Record-Keeping: Establish a digital archive for XML plus CAFE and backup routines to ensure long-term retention and audit readiness.
Flick Network provides a compliance-driven invoicing platform that works across jurisdictions including Panama. For the Panama context, Flick Network can support the transition to structured e-invoicing by offering:
Structured Invoice Generation: Flick will format invoices automatically in XML and apply the qualified digital signature (FEA) as required by SFEP.
Submission and Reporting: The platform can connect with an authorized PAC or the DGI portal to submit invoices for validation, receive CUFE and CAFE, and manage authorized status.
Invoice Archiving and Tracking: All validated invoices, XML plus CAFE, transmission logs and metadata, can be stored digitally with full traceability, helping with audits, internal reporting and compliance monitoring.
Integration with ERP/Billing Systems: Flick integrates with existing accounting, billing or ERP systems to standardize invoice workflows and support scalability as business grows.
Continuous Compliance Support: Flick stays updated with evolving regulations, including future resolutions, ensures data format compliance and version control, facilitating compliance with DGI requirements without manual rework.
Panama’s shift to structured e-invoicing under SFEP, backed by Law 256 and its implementing decrees and resolutions, marks a major transformation in tax compliance and business operations. With thresholds triggering mandatory PAC-based electronic invoicing from 1 January 2026 for many taxpayers, companies must prepare now.
By assessing revenue or invoice volume, registering with DGI, selecting a PAC or compliant software solution, integrating and testing workflows, training teams, and setting up archiving properly, a business can streamline operations, reduce errors, and remain fully compliant.
Platforms like Flick Network can ease the transition by managing generation, transmission, archiving and compliance end-to-end. Early adoption helps businesses avoid disruption, legal risk, and benefit from efficient, transparent and legally valid digital invoicing across Panama.
What is the DGI’s Electronic Invoicing System SFEP in Panama?
It is the national system through which structured invoice data must be generated (XML plus digital signature) and submitted via an authorized PAC or DGI’s free tool, granting legal validity under Panamanian law.
Who must comply with the e-invoicing mandate in Panama?
Taxpayers exempt from fiscal equipment (natural or legal persons), new registrants from 2022 onward, government suppliers, service providers, and businesses exceeding thresholds for revenue or number of invoices.
What happens if a business issues a PDF or scanned-copy invoice instead of a structured XML e-invoice?
Such invoices will not be legally valid under SFEP rules. They may be rejected by clients or deemed non-compliant for fiscal and audit purposes.
Is there a free tool for e-invoicing in Panama?
Yes. DGI offers a free facturador gratuito tool for taxpayers under defined thresholds, from 1 January 2026: annual revenues up to B/. 36,000 and up to 100 invoices per month. Taxpayers exceeding those thresholds must migrate to a certified PAC or system.
How long must e-invoice records be kept?
Issued electronic invoices, signed XML plus CAFE, must be archived electronically. Many firms retain records for at least five years to comply with audit and tax record-keeping practices.
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