Principal assets

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Andorra has one of the highest ranking standards of living, ranking as the 12th on the International Living Index
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Solid international financial system and banking sector with top 30 liquid banks in the world (more than 60% of liquidity)
2%

Profit tax: General tax 10%. Special Tax 2%.

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Important tourist destination in the Pyrenees (600+km of ski slopes, duty free zone)
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Just 200 km from Barcelona, 180 km from Toulouse and 800Km from Monaco
  • High standard of public safety and low crime rate
  • Dynamic and diverse business sector
  • Prosperous economy
  • New legal framework to open up to foreign investment from 2012 allowing foreigners to have 100% ownership in local companies
  • Easily accessible public administration, well-rated internationally
  • Innovative country and leader in the field of technology

Facts

Official name Principality of Andorra, founded 1278
Form of government Parliamentary co-principality with one legislative house (General Council). The 1993 constitution, transferred most of the powers of the coprinces to the General Council, which became a true national parliament
Co-princes President of France: François Hollande and Bishop of Urgell, Spain: Joan Enric Vives Sicília
International

Membership:

UN, Europe Council from 1993. Andorra is not a member of EU.
Special agreements: Automatic obtaining of Schengen Visa, Monetary Agreement with EU
Size 468 km2
Capital Andorra la Vella
Official language Catalan (Spanish and French are widely spoken)
Monetary unit Euro (€)
Population (2014 est.) 76,000
GDP (2014) cca. 2.5 billion

Taxes

  1. Profit tax: General tax 10%. Special Tax 2%. In case if company is conducting special business according to the Andorran Tax law article 23, 24, 38 than there is reduction of 80% of profit tax (Example: International business company can decrease tax rate to 2%). It is necessary to obtain confirmation from Tax authorities in order to have this tax rate.
  2. No double taxation. All taxes paid on income abroad will not be paid in Andorra.
  3. Double taxation agreements with Spain, France, Portugal, UAE and constantly growing
  4. No wealth tax
  5. No TAX on dividends for residents paid from Andorran company
  6. Capital gain tax is 10%. In case if resident who is selling the apartment owning it more than 10 years and in case if shares which are sold, do not represent more than 25% of company’s capital, then there is no capital gain tax.
  7. Tax reliefs
    • Amortization can be accelerated 2.5 times.
    • Certain additional reductions are possible.
    • 5% from Investment value can be used as tax credit. Buying of shares and bonds is not accepted as Investment. Investment in real estate, machines etc. are accepted.
  8. Tax on income of Non Residents – In case you pay to non resident company or person for services there is 10% tax but only if the service, project etc., is directly connected to Andorran territory.
  9. Tax on Royalties is 5%.
  10. IGI (Value added tax) is 4.5 %. There are some goods and services taxed 0% (medical services …) or 9.5% (banking services … )
  11. No property tax.
  12. Property transfer tax: 1,25% (Government) plus 0.5% – 1,25% (Comu – Municipality tax)

Reporting

IAS standards are used in Andorra.
Personal Tax declaration is to be submited by June 30th in the year following fiscal year.
Balance sheets are to be submited by June 30th in the year following fiscal year.
Turnover – VAT reporting
More than 3,600,000 EUR – Monthly VAT report
Between 250,000 EUR and 3,600,000 EUR – Quarterly VAT report
Less than 250,000 – 6 months VAT report

* Disclaimer:
The information and forms provided do not constitute legal or tax advice. The information and forms provided are provided “as is” and without any assurance that the information is correct, complete or current or that the forms are appropriate for your uses. The facts and circumstances of each business person or company may be unique and the clients and customers are encouraged to seek legal or tax advice if they have questions of a legal or tax nature. Author is not accepting any responsibility for this text

Services provided in Andorra

Company formation
Active residence
Passive residence

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