Taxation in Andorra
Andorra is a country located in the Pyrenees Mountains with the lowest tax rate in Europe. It is located between France and Spain. Expatriating to the Principality allows you to enjoy many advantages such as an affordable cost of living. It is one of the few countries that do not seem to be affected by inflation in the OECD area.
Taxation in Andorra is considered to be the most advantageous in Europe. The Andorran tax rate applied to individuals is a maximum of 10% on income. A new convention has just been adopted by the State and the Andorran government to better protect residents. This tax income is zero with a threshold of 24 000 euros of annual income.
Let's discover what is the income tax and the Andorran taxation as well as the measures taken by the government of the Principality.
Cadre fiscal :
les impôts et taxes en Andorre
Les impôts sur le revenu et la taxe ne s’appliquent pas de la même façon en Andorre pour les résidents fiscaux et ceux qui ne le sont pas.
L’impôt qui s’applique sur les revenus des ménages quand ils sont résidents dans la Principauté est l’IRPF. Il s’agit de l’impôt sur le revenu des personnes physiques. Il est donc destiné aux particuliers. Si vous bénéficiez d’un statut de résident fiscal en Andorre, ce régime relatif aux impôts et taxes est pour vous.
L’IRPF embarque l’ensemble des revenus imposables andorrans. Il sera prélevé sur le revenu global du contribuable (activité économique ou commerciale).
Dans le système de fiscalité andorrane, il y a l’IRNR qui s’applique sur les revenus des non-résidents. Ce sont des particuliers ou des salariés, des personnes morales ou physiques, percevant des revenus dans la Principauté sans pour autant disposer d’une résidence en Andorre. Ils y proposent notamment des services.
L’IRNR sera payé par les entreprises ou les personnes physiques (artistes, sportifs, experts d’une entreprise internationale, etc.). Ce sont ceux qui obtiennent des bénéfices sur le territoire andorran sans être résident. Cela peut aussi concerner la location de biens immobiliers en Andorre.
De nouvelles mesures entreprises en 2021 afin de renforcer sa convention fiscale
La Principauté d’Andorre, avec l’Espagne, a procédé en 2021 à la déposition d’instruments de ratification de leur Convention. Cela dans le principal objectif de prévenir les abus des conventions fiscales. Aussi, cette initiative avait pour rôle d’éviter l’érosion de la base d’imposition. Cette Convention a été mise en vigueur le 1er janvier 2022.
Notons qu’il fait partie des conventions négociées et adoptées par plus de 100 pays sous mandat des ministres des Finances ainsi que des dirigeants de banques centrales des états membres du G20. Elles se présentent comme un des résultats concrets du projet BEPS de l’OCDE et du G20.
More flexible taxation for companies and entrepreneurs
If you move to Andorra to start your company, the Principality offers a particularly flexible tax system. The corporate tax is among the lowest in Europe (2 to 10%), regardless of your sector. No tax will be applied to dividends. Also, you will not have to pay any tax on your company cars. Social security contributions (CASS) remain low.
The capital required to set up a company in Andorra varies according to the status. According to the law, if you wish to create a Limited Company (SL), you will need a minimum of 3,000 euros of statutory capital. In the case of a Limited Company (SA), it should be at least 60,000 euros.
Get help from an experienced accountant to manage your financial statements. They will be able to take care of the various taxes (annual state taxes, flat rate tax, etc.) and you will be able to take full advantage of your profits.
The ideal partner for your expatriation in AndorraContact us without further delay
Andorran banks are among the healthiest in the world
The banking sector is one of the pillars of the Andorran economic activity. If you want to start a business or invest in Andorra, the question of the bank is to be taken into account. Andorra’s banks are among the healthiest in the world. Why is that? Simply because it benefits from an economy built on solid foundations. The law defines the rules rigorously but is also flexible.
Local and national banks in Andorra are accessible to all residents, whether they are individuals, investors or businessmen:
- National Bank: it is intended for investments of a larger scale. This includes the creation of companies.
- Local Bank: it deals with procedures related to the protection and management of wealth.
Although the law and the agreements with Andorran banks are particularly rigorous, they offer flexible services.
More flexible taxation in the areas of real estate and inheritance
The tax advantages in Andorra also extend to real estate and inheritance. The absence of inheritance tax is one of the reasons that interest more and more expatriates. No taxes are imposed on real estate.
Anyone wishing to buy a property in Andorra will only have to pay 4% of the price of the property purchased. Notary fees (0.1%) and real estate agency fees (at a rate of about 5 to 10% of the sale price) will also be at your expense.
As for the inheritance tax for expatriates, Andorran law does not impose any inheritance tax, although it does not lack vigor. There is also no tax on gifts between individuals. As an expatriate, you will have two types of wills to choose from: notarial and holographic. During your lifetime, Andorran law allows the transmission of property in the form of sale, donation or exchange.
The key to a successful expatriation: call on tax professionals
Taxation is a particularly delicate subject. It can sometimes be difficult to master, especially for an expatriation project. For this to be successful, it is recommended to hire tax experts to assist you.
In Andorra’s case, all procedures are done in Catalan, its official language. By following the proper procedures, you will be able to take full advantage of the tax benefits offered by the Principality.
La Gestoria: key partner in your installation in Andorra
Whether you are a company or a private individual, using our Gestoria will make all the steps related to your expatriation in Andorra easier. We can put you in contact with experts in Andorran taxation. You can thus take full advantage of your rights and be in agreement with the tax law imposed in the Principality, as well as the taxation in your country of origin.
Whether it is questions related to dividend payments, the share of profits for your shareholders, the establishment of a tax file adapted to the services you offer or simply to know your rights as a company director, we are here to accompany you. In addition to guiding you through the tax process, we can also help you fill out your residency files and put you in contact with our partners or companies.
From the choice of your residence to your move from France or other countries, we are available to help you. The creation of a company in Andorra through a lawyer, the tax procedures, your residency status, the choice of education system for your children, we can assist you in every detail.