Cuba: Business Environment

Accounting Rules

Tax Year: The fiscal year begins on January 1st and ends on December 31 of the same year or any 12-months period approved by the tax authorities.
Accounting Standards: In January 2006, the Cuban financial information standards (Normas Cubanas de Informaciones Financieras, NCIF) were developed, the result is a mixture of international standards and standards specific to Cuba.
Accounting Regulation Bodies: Ministry of Finance and Prices
Accounting Reports: The accounting structure includes:
- The balance sheet which must be published on the first day following the end of the registration period. It should contain the assets (long-term capital, fixed assets, current assets), liabilities (Sources of owned capital, Long-term bonds, Credits and other bonds);
- The profit and loss account : Financial result, Profit distribution, Expenses on the budget, Expenses on extra-budget expenditures and other funds, Movement of financial resources for investments in capital or other financial investments.
Publication Requirements: The Cuban accounting system imposes on public and\or private companies the duty to release, annually, a certain amount of financial and accounting information. This duty is with regard to:
- A balance sheet
- A profit and loss account
- An incoming and outgoing financial flow summary
- A report on capital evolution.
Professional Accountancy Bodies: ANEC , National association of Cuban economists and chartered accountants (Spanish only).
Certification and Auditing: The financial statements of any entity subject to taxation in Cuba must be audited annually by an auditor that is duly authorized by the Ministry of Finance.
Accounting News

Tax Rates

Consumption Taxes

Nature of the Tax: Sales tax - Impuesto al valor agregado
Tax Rate: There is no VAT in Cuba but there is a sales tax whose rate varies depending on the type of the product. A tax rate of 2% is applied on wholesale sales, 10% on retail sales and 10% on services.
Reduced Tax Rate: Goods that are exported are exempt from sales tax; services that are exported are exempt from indirect tax levied on revenues (impuesto sobre los servicios) realized from the rendering of services. Services brought in from abroad and rendered on Cuban territory are subject to the tax.
Other Consumption Taxes: Excise duty are levied on certain goods such as alcohol, cigars and cigarettes.

Corporate Taxes

Company Tax: exempt for the first eight years, 15% rate from the ninth year
Tax Rate For Foreign Companies: Companies with total foreign ownership are taxed at a rate of 35%.
The income of foreign companies without a permanent establishment in the country is taxed at 4%, without any deduction.
Capital Gains Taxation: Capital gains are taxed as ordinary corporate income.
Main Allowable Deductions and Tax Credits: Deductible items include: the costs of production and goods sold, distribution and sales expenses, general and administrative expenses, operating expenses, financial expenses. Mandatory provisions are also tax-deductible.
Exemptions exist in certain cases: foreigners and franchise holders located in free-trade zones or industrial estates are exempt from tax on profits and labor force tax.
Other Corporate Taxes: There is a payroll tax, a stamp tax, a road tax, an agricultural land tax (levied per hectare ranging from CUP 30 to CUP 120 based on the four designated types of land), a property tax (2%), a property transfer tax (1% to 4%), a tax on the use and exploitation of forestry and wild fauna (levied per hectare ranging from CUP 45 to CUP 180 based on the four designated types of land), a tax on the use of workforce (starting from 20% on the first year of employment to 5% on the fifth and consecutive years) and social security contributions (determined yearly by the state budget).
Several taxes apply for the use or exploitation of natural resources and for the protection of the environment.
Other Domestic Resources: Cuba National Tax Administration

Country Comparison For Corporate Taxation

	Cuba	United States	Germany

Source: Doing Business - Latest available data.

Individual Taxes

Tax Rate

Income Tax	Progressive rate from 15% to 50%
Up to CUP 10,000	15%
CUP 10,000 - 20,000	20%
CUP 20,000 - 30,000	30%
CUP 30,000 - 50,000	40%
Over CUP 50,000	50%

Allowable Deductions and Tax Credits: Generally, 100% of the expenses incurred in the exercise of the activity is deductible from the income obtained, provided that at least 80% of these expenses are justified, except for those activities and sectors for which specific limits are established.
Special Expatriate Tax Regime: A tax on expatriates is levied on a monthly basis at 15% from the income gained or generated in Cuba.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: See the text of the double taxation agreements signed by Cuba
Withholding Taxes: Dividends: 0%; Interest: 0%; Royalties: 0%.

Sources of Fiscal Information

Tax Authorities: Cuba National Tax Administration
Other Domestic Resources: Cuban Tax Legislation (in Spanish only)

Intellectual Property

National Organisations: In Cuba patents, trademarks and blueprints have to be lodged at the OCPI (Cuban Bureau of industrial property). Copyrights come under the National Copyrights Center, the CENDA.
Regional Organisations: No
International Membership: Member of the WIPO (World Intellectual Property Organization)

National Regulation and International Agreements

Type of property and law	Validity	International Agreements Signed
Patent Law Decree no. 68. Inventions, scientific discoveries, blueprints, trademarks and brand names (March 14, 1983)	15 years
Trademark Law Decree no. 203 on brands and other distinctive signs (May 22, 2000)	15 years	Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
Design Law Decree no. 68. Inventions, scientific discoveries, blueprints, trademarks and brand names (March 14, 1983)	5 years renewable for 5 more years
Copyright Law Decree No. 14 (December 28, 1977): Law governing copyrights.	50 years	WIPO Copyright Treaty
Industrial Models Law Decree no. 68. Inventions, scientific discoveries, blueprints, trademarks and brand names (March 14, 1983)	5 years renewable for 5 more years

Legal Framework

Independence of Justice: The Cuban judiciary depends on the Cuban regime which uses it to reprimand political opponents. Many of them are charged with "dangerousness to society", a preventive measure defined as "a propensity to commit a crime". However, this charge is almost exclusively used for political opponents.

Standards

National Standards Organisations: ONC, National Bureau of Standards (Spanish only).
Integration in the International Standards Network: Cuba is a member of the International Organization of Standardization (ISO), of the International Telecommunication Union (ITU), of the International Organization of Legal Metrology (OIML) and of regional organizations. For more information consult the National Standardization Office website.
Classification of Standards: Cuba has adopted some international standards (ISO), and national standards (NC).
Certification Organisations: National Bureau of Standards

Business Practices

General Information: Worldtravelguide, Business etiquette
Ehow, Business etiquette
Opening Hours and Days: Banks are open Monday to Friday from 9 AM to 5 PM.
Administrative offices are open Monday to Friday from 9 AM to 12 PM and from 1 PM to 4.30 PM.
Shops are open Monday to Saturday from 9 AM to 6.30 PM and Sunday from 9 AM to 12.30 PM.

Public Holidays

Victory of Armed forces	January 2
International Labor Day	May 1
Independence Day	May 20
Revolution Days	July 25-27
Anniversary of the War of Independence in 1868	October 10
Triumph of the Revolution (Liberation Day)	January 1

Holiday Compensation: If a public holiday falls on a Saturday, then the following Monday is not a working day.

Periods When Companies Usually Close

New Year's Day	January 1
Liberation Day	January 2
Labor Day	May 1
Anniversary of the Revolution	July 25
Anniversary of the Revolution (Rebellion Day)	July 26
Independance Day	October 10
Christmas Day	December 25
New Year's Day	January 1

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