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Panama SEM Form 1119: what it is and what it is used for

Panama's DGI adopted Form 1119 V:1 for the SEM Withholding Tax Return and enabled code 958 for the related payment.

By: Julissa LewisUpdated: 31/08/20264 minEditorial standards ↗

At a glance

✓The form is filed through E-Tax 2.0
✓DGI identifies it as the SEM Withholding Tax Return
✓It is associated with code 958 for international-tax payments
✓Transactions should reconcile with accounting records and supporting documents

What is Form 1119?

Panama's General Directorate of Revenue identifies Form 1119 V:1 as the SEM Withholding Tax Return. It was adopted through Resolution No. 201-1394 of February 5, 2025.

The filing is submitted online through E-Tax 2.0.

What transactions does it report?

DGI states that the form covers specific withholdings related to payments made by or to companies under the SEM regime, depending on the type of transaction described by the applicable rules and official guidance.

One rule highlighted by DGI is a 5% withholding on 50% of certain payments for services received from individuals or legal entities domiciled outside Panama, resulting in an effective 2.5% rate.

Why accounting and withholding reporting must reconcile

Before a filing is prepared, payments, beneficiaries, concepts, invoices, and supporting documents should be correctly identified in the accounting records. Reconciliation helps reduce differences between tax reporting and the books.

For multinational operations, clear traceability also supports headquarters-level internal reviews.

FAQ

Frequently asked questions

Where is Form 1119 filed?

DGI states that the form is filed online through the E-Tax 2.0 system.

What payment code is associated with SEM Withholdings?

DGI lists code 958 in the International Tax Payment Slip.

Official and reference sources

JJL uses official sources to keep these guides aligned with publicly available information. Application to a specific case should be professionally validated.

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