Tax advantages of Andorra
Andorra offers much lower taxes than its neighboring countries Spain and France, and some of the lowest in the world.
- Tax on Products and Services :
In contrast to France and Spain, where the VAT is 20% or 21% respectively, in Andorra it is only 4.5% of the general VAT (called IGI). In health, education, rent, food and culture it is reduced to a 3.5%. Being therefore one of the countries with the lowest percentage of all Europe.
- Corporation Tax :
In relation to corporate tax, its maximum is 10%, since the legislation provides. That is why it is an ideal country for SMEs and multinationals, making it one of the lowest in Europe.
- Taxes on the Income of the Physical Persons :
The PIT in Andorra does not apply to wages below € 24,000 per year .From this amount, it is in accordance with the income. Its maximum is 10%, which is applied to salaries starting at € 40,000. In Spain, however, it reaches the 53% in the higher salaries.
Tax exemptionsin Andorra
The taxation in Andorra also offers a number of benefits in the form of exemptions for both employers and businesses:
- Exemption on the first € 3,000 from returns on capital gains.
- Total of the dividends issued by the Andorran company, and received by an also Andorran resident.
- The 100% of the first € 24,000 are exempt from personal income tax, and the 50% of the next € 16,000
This makes the Principality a very attractive option to create or move all types of businesses there, either as a company or as a freelancer, including holdings, e-commerce companies, or real estate investments.
