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Taxes in Andorra
Andorra has an internationally comparable tax framework, but at the same time very attractive, which makes Andorra a top-level destination for both legal entities and individuals. If you are thinking about investing in Andorra you must know how taxes will affect you. The main taxes that you will have to pay in Andorra are the following:
1. Personal income tax (IRPF in Andorra)
Implemented in 2015, it taxes world income obtained by individuals who are tax residents in Andorra.
The tax rate for this tax is one of the lowest in Europe, the maximum rate being 10%. The withholding tranches are as follows:
- 0% up to 24.000 euros.
- 5 % from 24.000€ to 40.000 euros.
- 10 % from 40.000 euros.
In the case of marriages, in the case that one of the members does not obtain income, the member who obtains them will be exempt up to 40.000 euros.
Likewise, there are various deductions to apply, an exemption on the first € 3.000 for investment income and there are no withholdings on dividends distributed by Andorran companies.
2. General Indirect Tax (IGI), (IVA en Andorra)
It would be the equivalent of the Spanish VAT. The general tax rate of 4.5%, being the reduced rate of 1% that applies to food and water for human or animal consumption, books, newspapers and magazines.
3. Corporate tax (IS)
Introduced in 2012, taxes world income obtained by companies or legal persons that are tax residents in Andorra.
Any legal person that meets any of the following requirements is considered a tax resident:
- That they have been established in accordance with Andorran laws.
- That they have their tax domicile in Andorra.
- That they have their headquarters of effective management in Andorra, when they reside or exercise the general management and control of the production of all their activities or businesses from the country.
Andorran corporate tax is very competitive compared to other countries, with a tax rate of 10%, which can be reduced by up to 2% for certain types of company. SICAVs are exempt from this tax.
4. Other taxes
In Andorra, some taxes that are traditionally present in neighboring jurisdictions such as the following do not apply:
- Taxes on wealth.
- Taxes on donations.
- Inheritance tax.
5. Websites of interest in Andorra:
- Government of Andorra: https://www.govern.ad/
- Taxes in Andorra: https://www.impostos.ad/
- Social Security Andorra: https://www.cass.ad/
- Inmigration Andorra: https://www.immigracio.ad/
- Statistics Andorra: https://www.estadistica.ad/
6. Frequently asked questions about taxes in Andorra
What taxes are paid in Andorra?
The main taxes you will have to pay in Andorra are the following:
• Personal income tax (IRPF in Andorra)
• Indirect General Tax (IGI), (VAT in Andorra)
• Corporate income tax (IS)
How much do you pay in taxes in Andorra?
Andorra's tax burden is the second lowest in the Euro zone, standing at 25% with only one country ahead of it, Ireland.
The tax burden includes direct and indirect taxes and social contributions paid by individuals and companies.
How much is the personal income tax in Andorra?
The sections of the personal income tax in Andorra are as follows:
• 0% up to 24.000 euros.
• 5% between 24.000 euros and 40.000 euros.
• 10% from 40.000 euros.
How much is the VAT in Andorra?
The general VAT tax rate is 4.5%, the reduced rate being 1% applies to food and water for human or animal consumption, books, newspapers and magazines.
VAT in Andorra is knowen as IGI (Impuesto General Indirecto).
How can we help?
We take care of carrying out all the necessary procedures related to its implementation in Andorra:
Company set up
We carry out all the necessary work for the set-up of your company or business, taking care of all the procedures.
Obtaining active residency
Both for self-employed or for workers on behalf of third parties, we help throughout the process of obtaining your residency permit.
Obtaining passive residency
We take care of carrying out all the necessary procedures to obtain your passive residency. A great opportunity to settle and live in Andorra for all those people that manage their own investments and wealth, are professionals with international exposure or for scientific, cultural and sport reasons.
Advice for obtaining tax residence
We offer global advice in your decision of changing your tax residence to Andorra, accompanying you throughout the process to obtain your residence authorization.
Contact us
Our clients always find us. We are not only qualified and experienced professionals, we are also close, accessible and sensitive with the desire of giving the best solution. We are honest and upright.
The client, his interests and satisfaction are always at the core of our activity.
If you are thinking of investing in Andorra and have any questions, do not hesitate to contact us and we will advise you on whatever you need.