Panama gives smaller taxpayers a free invoicing tool, and for years many companies leaned on it instead of a full integration. Starting January 1, 2026, though, that free tool comes with strict limits. Companies running Business Central Panama above those limits now need a real PAC integration, not a workaround.
That shift makes this a good moment to understand how Panama's model actually works.
How the Panama Electronic Invoicing Model Works
Under the Sistema de Factura Electrónica de Panamá (SFEP), every invoice is generated as XML, digitally signed, and sent for validation through a Proveedor Autorizado Calificado (PAC) — or, for qualifying small taxpayers, through the Dirección General de Ingresos (DGI)'s free tool. Once validated, the document receives a CUFE (Código Único de Factura Electrónica) and an authorization, and the buyer gets a CAFE (Comprobante Auxiliar de Factura Electrónica) — the human-readable version carrying the CUFE and a QR code. The PAC then transmits the authorized document to the DGI within a set window, typically 48 hours.
Why the Free Tool's New Limits Matter
As of January 2026, the DGI's free facturador is limited to taxpayers billing up to B/.36,000 annually and issuing no more than 100 documents a month. Cross either threshold, and the company must migrate to a PAC or build its own DGI-certified integration. For a growing business, that migration point can arrive faster than expected.
Where This Shows Up in Business Central Panama Projects
For implementation teams, a few configuration points recur:
- Confirming whether the taxpayer qualifies for the free tool or needs a PAC integration
- Maintaining the electronic signature certificate issued by the Dirección Nacional de Firma Electrónica
- Generating the CAFE with its QR code for delivery to buyers
- Transmitting authorized documents to the DGI within the PAC's required window
- Archiving electronic documents for the minimum five-year retention period
- Handling the transition cleanly when a company crosses from the free tool into a PAC mid-year
Common Challenges in Panama Implementations
Most issues we see come from a handful of recurring gaps:
- Staying on the free facturador past the new volume or revenue limits without noticing
- Double-entering data between a standalone facturador and the core business system
- Missing the PAC's specific technical requirements during migration
- Failing to reconcile CUFE and CAFE records with sales and inventory when the process isn't automated
- Underestimating how quickly a growing business crosses the free tool's thresholds
Each one is manageable in isolation, but together they add real operational drag as transaction volume grows — exactly the growth a successful Business Central rollout is usually meant to support.
Why a Dedicated Localization Matters for Business Central Panama
A proper Panama localization generates invoices directly from the sale, integrates with a certified PAC, and produces the CAFE automatically — no re-keying data into a separate facturador. Built as an extension, it does this without changing Business Central's core, and it keeps working as the company grows past the free tool's limits without a disruptive mid-year migration.
How LLB Solutions Supports Business Central Panama
LLB Solutions' for Microsoft Dynamics 365 Business Central covers DGI electronic invoicing through certified PAC integration, tax reporting, and detailed fiscal information — built as an AppSource-certified extension. For companies approaching the free tool's new limits, the localization is designed to make that migration a configuration change rather than a system replacement.
Panama's 2026 changes push more companies out of the free facturador and into a real PAC integration. Rather than treating that migration as a scramble, companies that plan the transition into their Business Central Panama environment early keep invoicing running without interruption.
For Microsoft partners, this is also a natural moment to check in with clients who set up Panama invoicing years ago on the free tool and may not realize the limits have changed.
See how LLB Solutions' Panama Localization fits your Business Central project —