Taxation in Andorra

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Paying TAXES in Andorra

If international companies would only think of tax havens and offshore companies, this would be a serious mistake. Because if so, these countries with tax advantages would come to an end in the coming years.

The OECD countries, Europe, the United States and the G20 countries are fighting against corporate fraud and the abuse of multinationals. And in the meantime, companies are fighting for fiscal improvements (not tax evasion) by setting up in countries with lower fiscal pressure, as they can not cope with such a strong fiscal structure. And so they are doing international business from other countries, where their taxation is more advantageous.

Taxation in Andorra is the perfect example of legality and transparency, but with low taxes capable of competing with any country in the world that is not considered a tax haven.

Andorra, an IDEAL COUNTRY  for your company

Taxation in Andorra

Andorra is the best option to start a business, not only because it is the country with the lowest corporate tax in Europe, but also because of the lowest business costs in Europe.

The minimum salary in Andorra is 1,017.47 euros and the rents of the premises, according to its area, are from 400 euros per month, and can benefit from a deduction of 2% in corporate tax. As you can see, it is much more profitable compared to other countries whose tax benefits are also low, such as Malta, Cyprus, Ireland and even Switzerland.

Costs such as electricity, expenses of auditors, managers and annual maintenance are very competitive compared to Spain.

The personnel required for any company is the most appropriate, since Andorra is a trilingual country and its university education is comparable to the ones in Spain or France.

RISK factors

Being taxed in Andorra

All the operations that a company usually generates are considered as operations with risk factors, since it can be determined if a company, fiscally speaking, can have a low taxation for reasons of optimization of fiscal resources, or because it is actually a tax evasion. All these resources are considered risk factors to be able to determine if a company is operating correctly in the country that performs it, especially if we are talking about holdings or companies whose taxation is low.

These companies that experience a higher level of risk should have the following characteristics:

  • The company has to be located and registered in the country.
  • Decisions must be made in that same country.
  • Accounting should also be carried in that country.
  • The banking activity must be carried out in the country.
  • The volume and function of the activity will have to be carried by qualified personnel.
  • The operating expenses will be in the country.
  • Some countries require that a high percentage of their executive committee must be resident in the country, and their executive councils being have to be held in the country too.
  • The executive staff must speak the language of that country, and at least the Executive Director must speak it.
  • Have insurance with sufficient coverage.
  • The offices must be properly equipped to perform the work.
  • Clients, suppliers and related companies must be varied.
  • If a company is about international trade, it is convenient it joins the chambers of commerce of the country.
  • It is convenient that the clients of holdings are from a different nationality than the investors.

All of this depends on the country, but in the case of Andorra’s taxation, it must be taken with special care given its high tax advantages. Especially if we compare it to the rest of the countries of the European economic community, especially Spain and France. Thats is why companies and individuals must be especially careful to carry out a safe and correct taxation.

If you want to forget about these concerns, do not hesitate to contact Andorra Advisors.

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Frequently asked questions about tax advantages in Andorra

Andorra has proven to be a model to follow in matters of transparency and legality while maintaining low taxes without being considered a tax haven.
In addition to being one of the countries of the European Union with the lowest corporate tax, it offers costs for the company below the European level.The rental prices of premises are from € 400, and other costs such as external or consumable professionals, are very competitive compared to other countries in Europe.
They attend to those elements that can affect the performance of the economic activity of the company.
For any company operating in Andorra, the greatest risk may be the human factor, given that being a small country, the offer according to which professional profiles may be limited.
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21-01-2020