The electronic invoice will be used voluntarily in Panama starting in September 2018

The electronic invoice will be used voluntarily in Panama starting in September 2018

23/04/2018

Immersed in the pilot plan phase to implement the electronic invoice, Panama’s government recalls the benefits that the electronic format will provide to companies, consumers and public administrations in the country. Although their voluntary adoption will begin later, the General Tax Directorate of Revenue trusts that the advantages of the new system will encourage widespread use among taxpayers.

Publio Cortés, general director of revenue, recently recalled the objective of the pilot plan in which 43 companies will participate. During this phase, “tests and adjustments will be made and lessons will be learned in order to make improvements before the e-invoice’s voluntary implementation.” According to Cortés, the pilot plan will be developed throughout the first half of 2018 and using electronic invoicing in Panama will be voluntary starting in September 2018. The General Tax Directorate of Revenue hopes that once the phase is finalized and the transition period begins in which the electronic invoice and the tax equipment coexist together, taxpayers will opt for the e-invoicing system based on their cost benefit analysis and the many advantages the system offers.

The Electronic Invoice Project promoted by Panama’s National Government, involves the stages of design, construction, the voluntary pilot plan and widespread usage and covers a developmental period of approximately two years and its purpose is the implementation of a model for fiscal documents that are digital and legally valid. It began in December 2016 and plans to begin its mandatory phase in 2019.

Panama’s government bases the implementation of the electronic invoice on the advantages that the adoption of the e-invoicing system will bring to the country both in the public and private sectors.

Advantages of Panama’s Electronic Invoice

  • It will reduce levels of non-compliance, fraud and tax evasion. According to the General Tax Directorate of Revenue, the electronic invoice will make the information management process that’s currently in place more efficient, which will reduce levels of non-compliance and tax fraud.
  • It will boost electronic commerce and increase business opportunities for companies.
  • Economic savings. Up to 75 % of savings have been calculated due to costs related to invoice printing, storage, distribution and accounting management.
  • Increase productivity. It has been estimated that productivity will increase up to 84% thanks to automating processes.
  • It will enhance the government’s role as “big buyer”. Through electronic invoicing, it will have more control over purchases, streamlining payment processes to suppliers, greater control of inventory, etc.
  • It will contribute to conserving the environment. It has been estimated that 56 trees are saved for every million invoices.

In addition to these advantages, electronic invoicing provides other important benefits:

  • Greater efficiency and the elimination of human errors, as a result of automation and fully integrated processes.  Electronic invoices can be automatically generated and transmitted from the service provider to the recipient. Thus, most economic benefits are not due to savings related to printed material and shipping costs, but rather to the total automation and integration of the processes between business partners from the start of the order to the payment.
  • Shorter times for delivery and invoice collection. The efficiency of the issuance and reception processes, their immediacy and the practical elimination of errors in generation and accounting relating to invoices contributes to reduce invoice collection deadlines.
  • Greater security. Invoices are sent using private networks or specific protocols such as AS2, FTPS, Web Services, VAN (Value Added Network), etc.  In addition, the digital signature systems guarantee the integrity, origin and authenticity of these invoices.
  • Agile, safe and legal storage. The original and signed documents are protected for at least the time established by current legislation. This reduces storage costs and facilitates the consultation of old invoices.

It should be remembered that these benefits will mean switching to e-invoicing. In the global context, it’s necessary to develop electronic data interchange (EDI) to maintain the level of competitiveness in key sectors such as logistics, retail, maritime, automobile, financial, etc.

Panama is lagging behind in terms of electronic invoicing when compared to the rest of Latin America. Countries such as Chile, Mexico and Brazil already have consolidated models and have been examples for other Latin American countries.

Solutions adapted for the Electronic Invoice

The General Tax Directorate of Revenue has informed large and medium sized companies that they will have the option of making adjustments to their invoicing systems through their team of programmers or technology providers.

The development of technology that allows for the implementation of electronic invoicing in companies implies a profitable investment in the medium term given the benefits it brings to the internal management of the organization. The key is to have a specialized technological provider that offers different solutions tailored to the present and future needs of the client thanks to scalable products.

EDICOM is an international benchmark in technologies and services for data integration. Click here to know which of EDICOM’s applications for electronic invoicing is most suitable for your company.

EDICOM has experience in the development of electronic invoicing throughout the world and has a significant presence in Latin American with offices in Argentina, Brazil, Mexico, Chile and Colombia.

Through its International Electronic Invoicing Observatory, it studies the advances that are produced in this technology and future incorporations such as the one in Panama. This data is essential to keep the Global E-invoicing Platform updated.

e-invoicing panama

e-Invoicing Platform

A single solution that lets you issue electronic invoices in any country worldwide

Check the latest news in...

Resources

E-Invoicing with the Public Administration in France
Learn about the public sector fiscal dematerialization project in France.