Cuban Government Approves Vehicle Sales Between Individuals and Companies

Among the new measures adopted by the Cuban government in the transportation sector is the authorization of vehicle sales between individuals and companies. Minister Eduardo Rodríguez Dávila highlighted during the Mesa Redonda on Tuesday that, until now, natural persons could transfer vehicle ownership among themselves, and legal entities could do the same, but legal entities couldn't transfer ownership to natural persons.

"With the new decisions, ownership transfer is now permitted between all natural and legal persons. However, for legal entities that are state-owned or have state participation, transferring ownership to a natural person requires approval from the Council of Ministers," he stated.

"For instance, a microenterprise can transfer ownership of a vehicle to a natural person, just like a religious organization, a foreign representative office in Cuba, or a branch," he elaborated.

The procedure remains the same as the current one for ownership transfer between natural persons: before a notary public, paying the transaction value and the corresponding tax, all through the bank. The prohibition remains for foreign diplomatic legal entities to buy or sell a vehicle to a natural person.

Rodríguez Dávila also mentioned that natural persons can acquire vehicles from authorized dealers in convertible currencies, like IMPEXPORT and CIMEX S.A.

Vehicle Pricing and Importation

"The vehicles for sale come from imports and those that conclude their rental period in tourism. The sale prices are formed by market correlation among natural persons, with a margin ranging from 350% to 500%, of which 30% is the commercial margin of the dealer, and the rest forms a special tax. Although this tax is collected in USD or MLC, it is credited in national currency at a rate of 1x24 into a fund managed by the Ministry of Transportation," he explained.

"For legal entities, the sale price is the acquisition or import cost, plus a commercial margin of up to 30%. Another tax is applied to the classes of motorcycles, cars, rural cars, and trucks, with rates of 100%, 150%, and 200%," he specified.

This controversial topic has sparked criticism against the regime for the high prices of imported cars in Cuba, making it an almost impossible dream for highly qualified professionals in the country.

The official also shared recent data on social media regarding vehicle import prices in Cuba, with infographics detailing how the government forms the prices of imported vehicles. He specified that they used a hypothetical value of 10,000 USD "to facilitate understanding." To determine the final price of the vehicles, the Supplier Price in Cuba, which is the initial value of the vehicle including freight and insurance, is considered. This base price in the infographic is 10,000 USD or euros.

To this base price, Import Costs are added, which include tariffs, customs services, handling, and transportation of the vehicle, representing approximately 6% of the supplier price, equivalent to 600 USD or euros. The next component is the Commercial Margin Rate, a margin applied by the selling entity in Cuba. This margin can reach up to 20% of the base price, resulting in an increase of 2,120 USD or euros, bringing the dealer's sale price to 12,720 USD or euros.

Additionally, a Special Tax by Segment or Range is applied, varying according to the type of vehicle. For high-end cars, this tax is 35%, equivalent to 4,452 USD or euros, while for other types of vehicles it can be 25% or 15%. The total amount payable by the buyer is determined by summing all these components. For example, a car, rural car, or truck has a final price of 15,900 USD or euros; a high-end car reaches 17,172 USD or euros; while vehicles of other classes like minibuses, motorcycles, or tricycles have prices ranging from 14,628 to 15,264 USD or euros.

Cubans were unable to buy new and used motorcycles, cars, trucks, and minibuses until 2013, when Raúl Castro allowed the purchase of second-hand and new vehicles, but only through the government and with a 100% tax. Until then, interested parties needed the personal approval of the vice president of the country, commonly known as the "letter."

In 2011, the regime authorized the sale of used cars between Cubans, but did not eliminate the requirement for the vice president's signature. Furthermore, new cars could not be purchased.