Legal Information is a Business Necessity Comparative Low Series THE DIVISION OF COMMERCIAL LAWS SUPERINTENDENT OF DOCUMENTS, WASHINGTON, D.C. U. S. DEPARTMENT OF COMMERCE HARRY L. HOPKINS, Secretary BUREAU OF FOREIGN AND DOMESTIC COMMERCE • ALEXANDER V. Dvs. Director Comparative Law Series GENERAL ΤΑΧΑΤΙΟΝ IN CUBA By Commercial Attache Albert F. Nufer, Habana The system of taxation in Cuba is mainly indirect. In recent years some direct taxes have been created. They represent only a small percentage of the total, however. While Cuba still applies some taxes established under the Spanish regime, the majority post date the independence of Cuba. Approximately 80 percent of the taxes in force in the Republic are federal taxes. This study is limited to those levied by the Central Government, but mention is made in the last chapter of a few of the leading municipal taxes. For the convenience of readers the following groups: Group 1 Group 11 Group 111 Group V taxes are divided into the Customs Duties; Duty Surcharges and Special Taxes on Imports; Consular Invoice Fees; Port Charges. Consumption; Excise and Other Taxes. - Profits; Commercial Operations. Group IV - Property; Salaries; Inheritance. Group VI Group VII Group VIII Group IX Group X Special Public Works Taxes. Communications. - Miscellaneous Taxes. Municipal Taxes. GROUP I CUSTOMS DUTIES - DUTY SURCHARGES AND SPECIAL TAXES ON IMPORTS The first Cuban Customs Tariff of January 1, 1899, continued in force until June 14, 1900. The second tariff remained in effect until October 19, 1927, but in the meantime many modifications were introduced. On August 24, 1934, a number of changes were made in preparation for the Reciprocal Trade Agreement with the United States which was signed on the same day and made effective on September 3, 1934. Specific rates of duty predominate. There are, however, important ad valorem duties. Articles the growth, produce or manufacture of the United States enjoy preferential tariff treatment. The duties on products from non-treaty countries are subject to periodic revisions in accordance with the so-called "Import Control Law" of March 15, 1935 (Law 14). The tariff and customs regulations are enforced by customhouses under the jurisdiction of the Director General of Customs. Duty Surcharges and Special Taxes on Imports 1 Luxury articles pay a 10 percent duty surcharge; other articles pay a duty surcharge of 3 percent, except those of prime necessity and raw materials on which there is no duty surcharge. (Special Public Law) 1 In addition to the above, there exist the following special duty surcharges and taxes on imports: Precious metals and manufactures thereof, jewelry of all kinds, pictures and alcoholic beverages pay a special duty surcharge for charity purposes (Obras Beneficas) of 10 percent. Imported passenger automobiles pay a special tax of 20.00 pesos each, while imported cigarettes (except those imported from the United States) special tax of 5 centavos per package, for the same purpose. (Law of June 29, 1928.) pay a Imported rice pays a special tax of 0.10 peso per 100 kilograms, except rice grown and milled in the United States, France and French Colonies, Protectorates and Mandates, which is exempt from this tax. (Decree-Law 806 of March 4, 1936; and Decree 1146 of April 26, 1938.) Petroleum products pay a surcharge of 1/100 of 1 percent of all taxes including customs duties, while imported coal and coke (which are duty-free) pay a surcharge of 10 percent on the port charges and other taxes. (Law of January 29, 1931; and Decree 363 of March 14, 1931.) In addition to the generally applicable duty surcharges summarized above, Article IV of the so-called "Import Control Law" of March 15, 1935 (Law 14), authorized the President to increase the maximum duty rates in certain instances upon the recommendation of a special "AntiDumping Committee." As a result thereof, certain textiles imported from Japan are currently assessed penalty surcharges on the corresponding maximum duty rates. (Recent Cuban Supreme Court Decisions have reportedly declared Article IV of the Law of March 15, 1935, unconstitutional and its provisions henceforth inapplicable. The surcharges in question, however, are still in force.) an No mention has been made of those duty surcharges which are integral part of the customs tariff as, for example, those assessed on the basic rates for textiles when they are imported bleached, dyed, made-up, or embroidered. 2 Export Taxes Money. An export tax of one-fourth of 1 percent on money or its equivalent, including all kinds of merchandise. The full amount of this tax is refunded, however, if the corresponding value of, or returns from, such exports are received from abroad within 120 days. (Public Works Law3 of July 15, 1925; Decree 1517 of July 15, 1925; and Decree 342 of March 4, 1929.) Molasses. A gross sales tax of 1 percent of the value of exported molasses.4 (Decree-Law 393 of November 8, 1935.) 1See Group VII for complete data on Special Public Works Taxes. Full information regarding customs duties and related charges on any article can be obtained from the Division of Foreign Tariffs, Bureau of Foreign and Domestic Commerce, Washington, D. C. 3See Group VII for complete data on Special Public Works Taxes. 4See Group III Commercial Operations. Minerals. A tax of 12 percent of the value of exported combustible minerals in their natural state, except exports of naphtha, petroleum and products obtained from refining petroleum. (Law of May 10, 1938.) Gold. A special tax of 15 percent of the cash value of authorized exports of gold coins (national or foreign), gold in bars, ingots or in any other unmanufactured form, and gold-bearing ore. According to Article 8 of Decree 2874 of September 27, 1937, the 15 percent tax is refunded in the case of gold-bearing ore upon receipt of proof that the metal recovered has been returned to Cuba within 120 working days. (Decree-Law 800 of January 8, 1935; and Decree 2874 of September 27, 1937.) There are no other export taxes in force in Cuba. Consular Invoice Fees Two percent of the f.o.b., port of exportation value of merchandise produced or manufactured in the United States, United Kingdom, Canada, Spain, France, and French Colonies, Protectorates, and Mandates; five percent of the value of products from other countries. This fee is collected by the Cuban consular officers, but, in their absence at Cuban Customhouses. (Bills of lading pay a consular fee of 1.00 peso except those covering merchandise shipped from the United States which are exempt.) (Law of February 14, 1903; Decree 1076 of November 11, 1908; Laws of June 29, 1911; June 18, 1917; July 9, 1921; January 29, 1931; January 22, 1932; Decrees 962 of July 14, 1933; and 2488 of October 27, 1933; Decree-Law 36 of February 27, 1934; Reciprocal Trade Agreement of September 3, 1934; Decree-Law 67 of July 8, 1935; Decree 715 of March 31, 1936; Law of June 30, 1936; Decrees 2746 of September 30, 1936; 2017 of July 10, 1937; and 2878 of September 28, 1937.) Port Charges Port Improvements Tax. A tax of 0.70 peso per metric ton on merchandise from the United States and 0.88 peso per metric ton from other countries; 0.10 peso per metric ton on coal. (Article 175 of the Customs Regulations of June 22, 1901; Laws of November 14; 1911; and July 24, 1917; Decree 1540 of September 12, 1928; and Decree-Law 213 of September 10, 1935.) Tonnage Dues. Fees vary according to classification of ships. (Article 176 of the Customs Regulations; Decree-Laws 39 of June 27, 1935, and 491 of January 7, 1936.) Pilotage Dues. Based on gross tonnage. Cuban vessels do not require the services of a pilot when entering Cuban ports; however, if they request the services of a pilot they must pay the corresponding fees. (Customs Tariff of 1899; Decrees 510 of March 18, 1922; 92 of January 18, 1924; 93 of January 24, 1924; 293 of February 22, 1924; 518 of April 1, 1925; 583 of April 3, 1925; 769 of May 6, 1925; 1957 of September 11, 1925; 194 of February 12, 1926; 335 of March 17, 1926; 712 of May 21, 1926; 905 of June 21, 1907; 213 of January 24, 1930; 1254 of September 15, 1930; 1527 of November 7, 1930; 692 of April 8, 1931; 122 of January 18, 1932; 2789 of November 3, 1933; 2790 of November 3, 1933; 1604 of June 27, 1934; Resolution of July 10, 1935; Decrees 219 of February 6, 1936; 1810 of June 10, 1936, and 1436 of July 16, 1938.) Inspection of Vessels. Fees based on tonnage. (Title II of Port Captaincy Regulations of May 1, 1900; and Circular 23 of March 19, 1921.) |