Over the last decade, tax planning in Andorra has gradually evolved to become a very attractive system for foreign investment. One of these changes occurred in 2012, with the formulation of the Foreign Investment Law, which establishes the fiscal framework that made Andorra stop being a tax haven. This caused that Andorra ceased to be considered at all levels a country where you can create an offshore company.
Tax planning in Andorra has made this country enjoy the lowest tax rates in Europe. Being the Personal Income Tax and the Corporation Tax of a maximum of 10% each. Obviously, depending on the commercial activity developed by each organization or company, taxes in Andorra will be different.
However, the average of these rates is approximately 5%, due to the amount of exemptions established by the taxation in Andorra. And also, to the long list of bonuses and deductions offered by the Department of Taxation. This is in order to achieve the aim of an optimal tax planning in Andorra. This means that the principality can offer an attractive tax framework to the taxpayer, so in the end their tax burden is minimal.
In addition, the value added tax or VAT is 4.5%, compared to 8% in Switzerland, one of the lowest in Europe. Especially if we take into account that its neighboring countries have much higher VAT rates: 20% in France and 21% in Spain.
Another important achievement of tax planning in Andorra is that individuals are exempt from paying taxes if they don’t earn more than € 24,000 of annual income. While in Spain, for example, the non-taxable personal minimum is € 5,500. This is a very attractive feature for entrepreneurs and workers in general who want to work in the Principality, and who still do not earn more than € 2,000 per month. Also enjoying the other advantages that this country offers to its citizens in terms of quality of life, education, infrastructure and culture. And many other important aspects for the proper development of a great quality of life in Andorra.
The Principality has signed in recent years tax exchange agreements with other countries such as Germany, Italy and France. Thanks to these agreements, it has been possible to reinforce the negotiations with these and other nations of the world.
It has also increased foreign investment and the choice of this country as a place to live, since the economy of Andorra is very sustainable.
Within the tax planning in Andorra, other systems also have a place, such as the indirect taxes, fees for special services and important goods. Plus the rate on gambling and real estate.
If you are interested in a consultancy which carries out your international tax planning in Andorra, contact us. We will optimize your taxes either with a company of products or services, with an e-commerce company, as an investor, or with the management of intangible products. Leave it in our hands and we will take full advantage of one of the best taxation in the world.
It was a radical change in the outside image of Andorra. It is no longer considered a tax haven, becoming a very attractive territory for foreign investment.
Andorra has the lowest tax rates in Europe. Corporation tax and personal income tax maximum values are only up to 10%. In addition, a VAT percentage of 4.5% much lower than its neighboring countries which go up tu 20% and 21%.
No, the values applied will vary according to the commercial activity of the company based in Andorra.
People who earn less than € 24,000 euros in annual income should not pay fees for the benefits generated. This is very favorable for all those who are starting new projects, since they will save the payment of these taxes.
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