In Cuba, foreigners who work, manage companies or properties must comply with the payment of taxes corresponding to them, according to Law 113 of the Tax System. The purpose of this law is to establish the guidelines for the work of foreigners in the country and the way in which they contribute to the Cuban economy and society with their taxes.
This tax system organizes and clarifies the conditions under which foreign employees meet their tax obligations, as well as those of foreign companies headquartered in the country.
Note 1Although the system is clear, it is advisable for foreigners to keep abreast of new regulations and changes in their legal situation, as small changes can alter the amount of tax payable.
Tax rates
There are different types of taxes that must be paid by a foreign citizen who does business in Cuba, some of these are
- Taxes on personal income
- Profit taxes
- Property taxes
- Property transfer taxes
- Customs Duty
Personal Income
One of the most common taxes is the one imposed on foreign workers on their income within the country. The rate applied is 15% of the sum of the salary and any bonuses. The employer is responsible for withholding this percentage from the foreign employee’s salary and then paying the amount to the National Tax Administration Office (ONAT).
Utilities
Foreign companies with a permanent presence in Cuba must pay 35% of the income generated in Cuba, this income being the result of the profits obtained from the production or provision of services. This rate may vary if audits or reviews of income indicate the need to modify the tax base.
Property Tax
Property tax is levied on the ownership of real estate or land by foreigners and is 2% of the value of the real estate or land in question, or between 30 and 120 Cuban pesos per hectare in the case of land, this value depending on the category in which it is located.
The transfer of property is subject to a 2% tax on the value of the property. This tax is significant if you are buying or selling real estate.
Customs Tax
The customs tax is the one that is applied to the importation of goods into the country, which affects not only foreigners but also Cubans, with the difference that it is also applied to objects of personal use of the former. This tax is determined according to the tariffs established for each type of imported goods.
Tax Returns
Foreign workers are required to file an annual tax return, detailing their income in accordance with their tax obligations. ONAT provides guidance and assistance in fulfilling these obligations, although it is advisable to seek legal advice to ensure that the payment of taxes does not become an obstacle to the successful development of a working life in Cuba.
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