Panama: Implementation of new form and tax code for SEM withholdings

New form and tax code for SEM withholdings effective February 12, 2025

The Ministry of Economy and Finance, through the General Directorate of Revenue, on February 5, 2025, issued a resolution adopting Form 1119 V.1 for the “SEM Withholding Tax Return” and enabling Tax Code 958 for the payment of SEM withholdings in the “International Taxation Payments slip.”

Form 1119 V.1 is mandatory for 5% withholdings on services provided by system of multinational corporation headquarters (sede de empresas multinacionales (SEM)) companies and for withholdings applied to individuals and legal entities for services provided to the SEM entity, both domestically and internationally. This form must be submitted online via the E-Tax 2.0 System.
Tax Code 958 is designated for “SEM Withholdings” within the International Taxation Payment slip for tax payments.

These implementations took effect on February 12, 2025, following their publication in the Official Gazette.

Read a February 2025 report prepared by the KPMG member firm in Panama

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Panama: Implementation of new form and tax code for SEM withholdings

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