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Advantages Exemptions

Tax advantages of Andorra

Advantages of Taxation in 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 holdingse-commerce companies, or real estate investments.

Frequently asked questions about taxation in Andorra

In Andorra, called IGI, the general tax is 4.5%. The one that affects culture, health, rents, education and food is reduced to 3.5%.

Its maximum applied is up to 10%, but depending on the type of economic activity, the corporate tax can be reduced to 2%.

This tax does not apply to those who have an income below € 24,000 per year. From that amount a percentage is applied depending on the income, never being more than 10%.

  • The first 3,000 euros obtained from the return on real estate capital.
  • Dividends received by an Andorran resident from an also Andorran society.
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07-05-2020

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