Benefits of the Andorran tax residence
The main advantage when creating your company or business in Andorra is its tax system and how you can plan your personal taxes in a profitable way.
- Andorra is the country that has the lowest value-added tax in Europe (VAT) with only 4.5%.
- An average of 15.5% of social contribution for companies.
- Company taxes on benefits are a maximum of 10%.
- Companies that develop international trade activities, investments and international financing, or management of intangible assets, are subject to only 10% of corporate taxes.
- Some holdings are exempt from corporation taxes.
- Important and generous tax exemptions, including 100% in the PIT (IRPF in Spanish) in the first € 24,000 per year.
- The affordable costs related to business and infrastructure.
- The annual expenses corresponding to the municipal, government and chamber of commerce rates for ordinary companies are around € 800.
Other business advantages of residing in Andorra
There are many tax advantages when you create a company in Andorra. But we must also consider another type of interesting advantages at the business level, such as:
- Its strategic location in southwestern Europe.
- The willingness to receive foreign businessmen and investors.
- The good infrastructures and health system that it offers.
- Crime rates almost nonexistent.
In terms of its great quality of life, we must highlight its appreciated mountainous landscapes with large ski resorts, and its very low pollution. Also a great climate for lovers of both winter and summer sports, as its temperature and climate are comparable to the Mediterranean. It is necessary to value its local gastronomy and also a great gastronomic variety brought from other countries. It has a great cultural diversity, since it combines Catalan, French and Spanish culture; and also Portuguese, given the large population of that origin.
Furthermore, Andorra has double taxation agreements (CDI) with Spain, France, Cyprus, Malta, Luxembourg, Liechtenstein, Portugal and the United Arab Emirates. These agreements are intended to prevent a person from having their income recorded twice due to residing in two different territories alternately, in this case living in Andorra and another country of the aforementioned alternately. Slowly Andorra is closing new double taxation agreements with other countries.
