New Tax Regime Enters Into Force In Cuba
- Submitted by: lena campos
- Business and Economy
- 01 / 03 / 2013
Cuba's new tax regime became effective on January 1, 2013, following the enactment of the nation's new tax code.
The new tax code introduces a total of nineteen taxes including environmental levies, social security contributions, and a sales tax.
State-owned businesses, which account for almost nine-tenths of all enterprises, will be subject to a 35% tax rate on profits. The new law also introduces a 25% social security tax, but this will be gradually reduced over a five-year period until it reaches 5%. Businesses with five employees or less will be exempt from this tax.
Meanwhile, a number of tax concessions will be introduced to stimulate economic activity and development, particularly for the agriculture sector.
A progressive income tax regime has been in place since the 1990s for privately-owned businesses, the self-employed and farms, starting at a rate of 15% on annual income up to CUP10,000 (USD377), increasing to 50% on earnings above PES50,000.