Dec. - The National Office of Tax Administration (ONAT) published this Tuesday in the Official Gazette of the Republic three legal regulations aimed at strengthening and updating the Cuban tax system, in line with the government projections approved since last year and with the transformations of the current economic scenario.
These are Decree-Law 107, which modifies several articles of the Tax Law; Decree 131, which updates the tax procedure established in Decree 308; and a complementary resolution that regulates the mandatory use of the Tax Identification Number (NIT) for all taxpayers, both individuals and legal entities.
According to Judith Navarro Ricardo, legal director of ONAT’s central office, the modifications respond to a comprehensive review process of the current regulatory framework, with the objective of expanding the powers of the tax administration, improving fiscal control, and adjusting the regulations to the country’s current economic environment.
Mandatory Use of the NIT in All Transactions
One of the most significant changes introduced by Decree-Law 107 is the generalization of the use of the NIT as the unique identifier for taxpayers in all economic, financial, commercial, and contractual relationships that have tax implications.
Ricardo Navarro explained that this number must be reflected in documents, contracts, invoices, and any operation that generates useful information for fiscal control, which will allow the ONAT to access data on income, activity levels, and compliance with tax obligations more efficiently and reliably.
In the case of individuals, the NIT corresponds to the identity card number, while for legal entities, a specific code is assigned that identifies the organizational form and other relevant details. “It is a unique number, like the identity card, that facilitates data cross-referencing as well as statistical and automated work,” he emphasized.
The directive pointed out that, until now, information from various entities was mainly received based on names, which complicated the processing of large volumes of data. “With the NIT, this dispersion is eliminated, ensuring greater accuracy in control,” he stated.
The complementary resolution also establishes a 180-day period for all entities handling tax information to adapt their systems and incorporate the mandatory use of the NIT in the data they provide to ONAT.
Changes in Surcharges and Tax Penalties
Decree-Law 107 also introduces modifications to the regime of late payment surcharges and the penalty system for non-compliance with payment obligations and formal duties.
Regarding the late payment surcharge, the maximum applicable limit is increased from 30% to 40% of the principal amount owed, in cases of greater delay in fulfilling the tax obligation. "The longer the time that passes since the obligation’s due date, the higher the surcharge will be," explained Arelys Pérez García, Director of Taxpayer Services at the ONAT central office.
Likewise, penalties for non-payment are updated and may now reach up to 40% of the principal amount plus the surcharge, replacing the previous scheme that combined fixed or percentage fines with lesser economic impact.
Furthermore, the handling of non-compliance with formal duties is restructured, such as failing to update data in the Taxpayers Registry, not submitting the sworn declaration, or not keeping accounting records. In these cases, a quota-based penalty system is introduced, ranging from 10 to 100 quotas, each valued between 100 and 1,000 pesos, depending on the severity of the infraction.
The quota amounts will be updated every year in the Budget Law, reflecting the economic situation.
Pérez García emphasized that these infractions have a significant fiscal impact. "Not being registered or not keeping data updated is, in practice, equivalent to operating outside the tax system," she noted.
Expansion of Powers for Non-Monetary Sanctions
Another new aspect of Decree-Law 107 is the expansion of ONAT’s powers to impose non-monetary sanctions, such as temporary or permanent closure of establishments and the revocation of licenses to conduct economic activities.
From the moment the regulation comes into effect, these decisions can be made directly by municipal and provincial directors as well as by the head of ONAT, without the need for additional procedures with other agencies, although subsequent communication with the corresponding governing entities will be maintained.
According to Ricardo Navarro, this measure will allow for a more agile response to serious violations and strengthen control from the territories, where oversight and auditing actions are concentrated.
Tax Procedure and Complementary Regulations
Decree 131 details how the modifications introduced by Decree-Law 107 are implemented in practice, specifying the procedures for the use of the Tax Identification Number (NIT), the application of sanctions, and the closure of establishments.
Additionally, it incorporates concepts such as the virtual tax domicile, a tool that will, in the future, allow electronic notifications and communications with taxpayers, although its implementation will be gradual and dependent on the creation of the necessary technological conditions.
Finally, the regulatory package includes a provision authorizing the Council of Ministers and the Ministry of Finance and Prices to exceptionally allow the payment of certain taxes in freely convertible currency when economic and social conditions so require, and always for specific sectors.
The authorities emphasized that these measures are not intended to raise revenue through fines. “Sanctions and surcharges are undesired revenue; what is sought is tax discipline and voluntary compliance,” Pérez García emphasized.
For download, in PDF:
Gaceta Oficial No. 97 (Ordinaria) (258 Kb)
(Taken from Cubadebate)
