With the aim of “correcting distortions and re-boosting the Cuban economy,” the government has ratified the updating of the regulations governing non-state economic actors.
On August 19, 2024, the Official Gazette has published several decrees that update the regulations applicable to micro, small and medium-sized enterprises (MSMEs), non-agricultural cooperatives and self-employed workers.
These measures include new provisions on the infringement regime, social security, the tax system and the procedures for the creation, merger and dissolution of entities.
Significant changes in the tax regime
The new regulations establish significant changes to the tax regime, including the elimination of the simplified tax regime, in force since January 1, 2024.
From this date, all non-state economic actors will be subject to a single general tax regime. In addition, tax benefits previously granted to MSMEs and self-employed workers, such as the exemption from payments during the first months of operations, will be eliminated.
As for SMEs, it has been determined that, after more than two years since their creation, they have demonstrated sufficient tax capacity. Therefore, the exemption from paying personal income tax on dividends obtained during the first year of operations is eliminated.
Self-employed workers who generate annual income of more than 500,000 pesos will be required to keep detailed accounting records, according to the Cuban Financial Information Standards. Those with incomes below this figure will only have to keep a basic record of income and expenses.
Tax on the Transfer of Assets and Inheritances
Other changes include the update in the payment of the Tax on the Transfer of Assets and Inheritances, which must now be made at the time of notarial formalization, and the implementation of a 5% tax on the Use of the Labor Force.
Specific changes are also being introduced for self-employed workers in commercial fishing, who will now be taxed under the general regime and must open a fiscal bank account, among other obligations.
These provisions, which will enter into force 30 days after their publication, also include the repeal of previous resolutions to avoid legislative dispersion and ensure consistent application of regulations.
With these changes, the government seeks to strengthen the collection of state revenues and ensure an equitable distribution of tax obligations, in accordance with the economic capacity of each taxpayer.
You can download the Gazette from this link.
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