Panama | Panama’s Tax Authority issues a calendar with implementation phases of the electronic invoicing system for operations and services carried out by banks and financial institutions

_{·       This Alert summarizes the three phases that banks and other financial institutions must implement with respect to the use of authorized fiscal equipment or the Electronic Invoice System of Panama for the operations and services they carry out.}

_{Based on Executive Decree No. 3 of 20 January 2023, the General Directorate of Revenues (DGI) issued Resolution No. 201-0717 of 26 January 2023, setting forth the phases in which banks and other financial institutions must implement the use of authorized fiscal equipment or the Electronic Invoice System of Panama (SFEP for its acronym in Spanish), for the operations and services they carry out.}

_{The following outlines the details of each phase and the respective implementation date:}

Phase I – Start date of 30 April 2023

In this phase, banks and other financial institutions must implement the use of the

SFEP for all commissions for services provided, such as:

Commissions and surcharges

_{·       Commissions for savings accounts}

_{·       Surcharges on savings accounts}

_{·       Commissions on fixed term deposits}

_{·       Current account commissions}

_{·       Current account surcharges}

_{·       Electronic commerce commissions}

_{·       Commissions for loans}

_{·       Fees for overdrafts}

Services

_{·       Online banking}

_{·       Mobile banking}

_{·       Checks sent and received for collection}

_{·       Safe deposit boxes}

_{·       Bank drafts}

_{·       Certification of checks}

_{·       Gift certificates}

_{·       Cashier's checks}

_{·       Local and international transfers}

_{·       Bank guarantees}

_{·       Documentary collections}

_{·       Credit letters}

_{·       Promissory notes}

_{·       Other charges for services rendered}

Phase II – Start date of 30 June 2023

In this phase, banks and other financial institutions must implement the use of the

SFEP for the interest generated by services provided, such as:

Interest Earned by:

_{·       Personal loans}

_{·       Mortgage loans}

_{·       Automobile loans}

_{·       Pledge loans}

_{·       Commercial loans}

_{·       Lines of credit}

_{·       Internal financing line loans}

_{·       Lines of credit advance}

_{·       Overdrafts}

Phase III – Start date of 31 August 2023

The use of the SFEP must be implemented for financial services provided by banks and other financial institutions such as:

_{·       Investment banking}

_{·       Money exchange}

_{·       Fund administrators}

_{·       Investment funds}

_{·       Savings funds}

_{·       Pension funds}

_{·       Retirement and social welfare funds}

_{·       Credit unions}

_{·       Finance companies}

_{·       Insurance and reinsurance companies}

_{·       Factoring}

_{·       Trustees}

_{·       Financial leasing companies}

_{·       Credit cards}

_{·       ATMs}

_{Notwithstanding the above, banks with an international license, which, from an office established in Panama, manage transactions that are perfected, consumed, or take effect abroad, and carry out activities that require authorization from the Superintendency of Banks, are exempted from the implementation of the SFEP, as long as they do not generate taxable income within Panama.}

_{Banks with a general license and an international license are required to use the SFEP for the financial operations covered under the General License but the operations covered under the International License are excepted from the use of the SFEP.}

_{Finally, this Executive Decree became effective from its publication in the Official Gazette of the Republic of Panama on 26 January 2023.}

For additional information with respect to this Alert, please contact the following:

·       Rafael Sayagues | rafael.sayagues@cr.ey.com

·       Luis Ocando | luis.ocando@pa.ey.com

·       Carlos Márquez | carlos.marquez@pa.ey.com

·       Meitner Gonzalez | meitner.gonzalez@pa.ey.com