Business Environment

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In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices

 

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

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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
Consumer goods serving as raw materials for industry or destined for export are exempted.
Other Consumption Taxes
Excise duty are levied on certain goods such as alcohol, cigars and cigarettes.

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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 are 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).
Other Domestic Resources
Cuba National Tax Administration
 

Country Comparison For Corporate Taxation

  Cuba United States Germany

Source: Doing Business - Latest available data.

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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.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the text of the double taxation agreement between Cuba and Spain
Withholding Taxes
Dividends: 0%; Interest: 0%; Royalties: 0%.

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Sources of Fiscal Information

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

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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  

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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.
Equal Treatment of Nationals and Foreigners
Chapter 3 of the Cuban Constitution recognizes that foreigners (permanent or temporary) have the same rights and duties as those granted to Cubans (protection of the individual and property, a duty to respect the Cuban Constitution and the law, submission to Cuban jurisdiction and to judgments rendered by the Cuban courts of law).  However,  in reality,  the Cuban judiciary's political dependency means that the foreigners' rights to a fair trial are not guaranteed.
The Language of Justice
Spanish.
Recourse to an Interpreter
There is no particular procedure.
Sources of the Law and Legal Similarities
The main source of law is the 1976 Constitution (amended in 1992 and 2002), which is based on Spanish and American laws. Nevertheless, the legal communist theory has also contributed to it thus enabling the judicial system to be fashioned in a way as to guarantee political control over the Cuban population.

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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).
Online Consultation of Standards
Refer to the Cubaindustria website (Spanish only).
Certification Organisations
National Bureau of Standards

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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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Latest Update: April 2022