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Cuba - Indirect Tax Guide

Cuba - Indirect Tax Guide

Explore the requirements and rules that apply to Indirect Taxes in Cuba.

Explore the requirements and rules that apply to Indirect Taxes in Cuba.

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General

Types of indirect taxes (VAT/GST and other indirect taxes).

Cuba does not have a VAT system. A sales tax (impuesto sobre la venta) applies to goods destined for use and/or consumption in Cuba. There is also an indirect tax levied on revenues (impuesto sobre los servicios) realized for rendering of services in Cuba. The rendering of services should be performed in Cuba to constitute a taxable event for this indirect tax.

Are there other indirect taxes?

Yes, excise duty (impuesto especial a productos y servicios) on certain goods such as alcohol, cigars, cigarettes, etc.

What supplies are subject to Cuban sales tax?

All goods that are destined for use and/or consumption in Cuba are liable to the Cuban sales tax. This is in principle applicable to all goods used and/or consumed in Cuba. Goods being exported are not used and/or consumed in Cuba. These goods are therefore not subject to the Sales Tax.

What are the standard or other rates (i.e. reduced rate) for VAT/GST and other indirect taxes?

A 2 percent tax is applied on wholesale sales, 10 percent tax on retail sales and 10 percent on services. The tax rates for the excise duties are to be specified in the annual budget law. Information regarding the rates is not provided in the law or in its related regulations and is therefore not yet available.

VAT/GST registration

Who is required to register for VAT/GST and other indirect taxes?

All persons and entities that are subject to the relevant taxes. You are subject to the relevant taxes if you sell goods for use or consumption or render services on Cuban territory. Taxable persons for the sales tax are importers, manufacturers and distributors of goods that are engaged in the sale of goods destined for use or consumption. Taxable persons for the indirect tax on services are those who render services on Cuban territory. There is no threshold.

Is voluntary registration for VAT/GST and other indirect taxes possible for an overseas company (e.g. if the annual turnover is below the relevant VAT/GST and other indirect taxes registration threshold)?

No regulations have been promulgated in this respect yet.

Are there any simplifications that could avoid the need for an overseas company to register for VAT/GST and other indirect taxes?

There are no simplifications for an overseas company.

Does an overseas company need to appoint a fiscal representative?

Yes, if it has a permanent establishment.

Which forms and supporting documentation does an overseas company need to submit for VAT/GST and other indirect tax registrations?

No regulations have been promulgated in this respect yet.

Is grouping* for VAT/GST and other indirect taxes possible?

No regulations have been promulgated in this respect yet.

VAT/GST compliance

How frequently are VAT/GST and other indirect tax returns submitted?

Taxpayers are required to submit monthly tax returns.

What are the exchange rate rules in your country?

The tax return can be filed either in Cuban peso (CUP) or in Cuban convertible peso (CUC).

International Supplies of Goods and Services

Exports – Goods

How are exports of goods treated?

Goods that are exported are exempt from sales tax (impuesto sobre la venta).

Exports – Services

How are exports of services treated for VAT/GST and other indirect tax purposes?

Services that are exported are exempt from indirect tax levied on revenues (impuesto sobre los servicios) realized with rendering of services.

Imports – Goods

How are goods dealt with on importation?

Goods that are imported are subject to import duties.

Imports – Services

How are services brought in from abroad treated for VAT/GST and other indirect tax purposes?

Services brought in from abroad and rendered on Cuban territory are subject to the indirect tax that is levied on revenues (impuesto sobre los servicios) realized with rendering of services.

VAT/GST recovery

Can an overseas company recover VAT/GST and other indirect taxes if not registered for VAT/GST locally?

No regulations have been promulgated in this respect yet.

Are there any exemptions with the right to recover or deduct input VAT/GST and other indirect tax?

Not applicable since there is no VAT system in Cuba.

Are there any restrictions to the deduction of input VAT/GST and other indirect tax?

Not applicable.

Tax points

When is VAT/GST due on a supply of goods or services?

The sales tax and indirect tax are in principle due within 20 calendar days following the end of the month in which the sales were made or the services rendered.

Invoices

Is a business required to issue tax invoices?

Yes, based on the general Cuban Financial Information Standards. However, there is no specific tax regulation regarding the issuance of invoices or equivalent documentation. The tax regulation does, however, make reference to the general Cuban Financial Information Standards based on which income should be accounted based on an issued invoice.

Is it possible/mandatory to issue invoices electronically?

No regulations have been promulgated in this respect yet.

Is it possible for the vendor to issue an invoice (i.e. self-billing)?

No regulations have been promulgated in this respect yet.

Record-Keeping Requirements

How long must records and invoices be retained?

The records and relevant tax documents should be retained for a minimum of 5 years.

Can the invoices be stored abroad?

No regulations have been promulgated in this respect yet.

Audits

Do tax audits take place on a regular basis?

The statute of limitation for a tax audit is 5 years.

Are audits done electronically in your country (e-audit)? If so, what system is in use?

Not applicable.

What penalties can arise from non-compliance?

Fixed amounts ranging from CUP350 to CUP10,000 or up to 30 percent of the tax due.

Special Indirect tax rules

Are there any special rules for the sale of a company by one taxpayer to another where VAT/GST and other indirect tax is not due on the sale?

There are no particular regulations.

Are there unique specific indirect tax rules that you would not expect to find in ‘standard’ VAT/GST jurisdictions?

Not applicable.

Does a reverse-charge mechanism apply for goods or services?

Not applicable.

Are there indirect tax incentives available (e.g. reduced rates, tax holidays)?

Yes, incentives for foreign investments.

Rulings

Are rulings and decisions issued by the tax authorities publicly available?

No.

Footnote

*By ‘grouping’ we mean: either a consolidation mechanism between taxpayers belonging to the same group (payment and refund are compensated but taxpayers remain distinct) or a fiscal unity for VAT/GST purposes (several taxpayers are regarded as a single taxpayer).

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