Cuba Sales & Services Tax Guide 2026

Overview — Indirect Taxation in Cuba

Cuba's indirect tax system differs from most countries by not having a standard VAT. Instead, the Impuesto sobre las Ventas y los Servicios (Sales and Services Tax) applies at a flat rate of 10% on most commercial transactions. The tax is applied at the point of sale to the final consumer and is not generally creditable along the supply chain. Businesses registered with ONAT must charge the tax on their taxable supplies and remit it periodically. The tax base is the gross value of the goods or services sold, excluding the tax itself. Certain luxury goods may attract higher rates, while essential items are zero-rated or exempt. The Ministry of Finance and Prices determines which goods and services fall into each category.

Standard Rate — 10%

The standard rate of the Tax on Sales and Services is 10% applied to the gross value of taxable supplies. Key characteristics of the tax include:

• Rate — 10% on most goods and services (standard)
• Higher rates — selected luxury goods and non-essential items may attract rates of 15–25%
• Zero rate — exports of goods and services (to encourage foreign trade)
• Exempt supplies — basic foodstuffs, prescription medicines, medical equipment, educational materials, books, public transport, and rental of residential property
• Tax point — at the time of delivery of goods or completion of services, or when payment is received, whichever is earlier

The 10% rate is applied to the final sale price. Businesses must show the tax separately on invoices issued to customers. Unlike VAT systems, there is generally no mechanism to recover input tax on business purchases, making the tax a cost to businesses rather than a creditable input.

Registration & Filing

Businesses and self-employed individuals with annual turnover exceeding CUP 500,000 must register for the Sales and Services Tax with ONAT. Once registered, businesses must:

• Charge 10% tax on all taxable sales and services
• Issue tax invoices showing the tax amount separately
• File monthly returns by the 20th of the following month
• Remit collected tax to ONAT at the time of filing
• Maintain sales records and invoices for at least 5 years

Small businesses below the CUP 500,000 threshold may voluntarily register. Self-employed individuals (cuentapropistas) must charge the tax on their services unless specifically exempt. ONAT may conduct audits of registered businesses to verify compliance.

Exempt & Zero-Rated Supplies

The following categories are exempt from the Sales and Services Tax in Cuba:

• Basic foodstuffs — rice, beans, bread, milk, eggs, cooking oil, fresh vegetables (as determined by the Ministry of Domestic Trade)
• Medicines & medical supplies — prescription drugs, medical devices, and hospital equipment
• Educational materials — textbooks, school supplies, and educational services
• Public transport — urban and intercity passenger transport services
• Residential rent — long-term rental of residential property
• Financial services — banking, insurance, and financial intermediation services
• Exports — goods and services exported from Cuba (zero-rated)

Businesses making both taxable and exempt supplies must apportion their activities and cannot recover input tax on exempt supplies.

FAQs

Is the 10% Sales Tax the same as VAT?

No. Unlike VAT, Cuba's Sales and Services Tax is a single-stage tax applied at the final point of sale with no input credit mechanism. Businesses cannot reclaim tax paid on their inputs, which means the tax becomes a cost of doing business rather than a pass-through to consumers.

Do I charge tax on services to foreign clients?

Services provided to foreign clients may be zero-rated if the service is performed for a non-resident and the benefit occurs outside Cuba. However, services physically performed in Cuba are generally subject to the standard 10% rate.

What are the penalties for non-collection of Sales Tax?

Failure to register, collect, or remit the Sales and Services Tax can result in fines of up to CUP 50,000, interest on late payments, and potential suspension of the business licence.

Disclaimer

This guide provides general information about Cuban Sales and Services Tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Cuban tax advisor or the Oficina Nacional de Administracion Tributaria for advice specific to your situation. InvestmentKit does not provide tax advice.