Andorra tax system: audit, reporting and optimization of taxation of Andorran companies and individuals: VAT, income tax and capital gains

Basic taxes (briefly)

Personal tax 0-10%
Corporate tax (in detail) Corporate tax is paid at the rate of 10%.
Capital gains tax. Details Capital gains are included in the general tax base.
VAT. Details The standard rate is 4,5%; reduced rates are1% and 0% for some particular products; 9,5% for bank services.
Other taxes social contributions, real estate tax, real estate transfer tax
Government fee
Stamp duty

International tax agreement

France, Liechtenstein, Luxembourg, Malta, Portugal, Spain, United Arab Emirates
   
Argentina, Australia, Austria, Belgium, Czech Republic, Denmark, Faroe Islands, Finland, France, Germany, Greenland, Iceland, Italy, Korea (Republic of), Liechtenstein, Monaco, Netherlands, Norway, Poland, Portugal, San Marino, Spain, Sweden, Switzerland


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Taxation of individuals

Personal income tax is paid at the following rates:

  • 0% on income up to 24,000 EUR;
  • 5% on income from 24,001 EUR to 40,000 EUR;
  • 10% on income over 40,000 EUR.

On capital gains, in general, the tax is paid at the rate of 10%.

Capital gains are included in the total tax base. Real estate gains are taxed at the rates from 1% to 15% depending on the period of possession prior to the sale; this tax does not apply to the sale of real estate after 10 years of possession.

Profit tax

Resident companies pay tax on their worldwide income, non-residents pay tax on income from sources in Andorra.

Income tax is paid at a rate of 10%.

Dividends received may be exempt from taxation under a number of conditions.

Capital gains are included in the total tax base.

Profit from the sale of real estate is taxed at rates from 1% to 15% depending on the period of ownership before the sale, if real estate is sold after 10 years of ownership this tax does not apply.

Profit from the sale of real estate is also included in the income tax base with a credit for real estate sale tax.

Holding companies holding shares in foreign companies may, under certain conditions, not pay income tax on dividends received and gains from the sale of shares.

VAT

The standard rate of VAT is 4.5%.

For certain goods and services, the rate is 2.5%, 1% and 0%, and for banking and financial services it is 9.5%.

Withholding taxes

Dividend and interest payments to non-residents are not subject to withholding taxes.

When paying royalties, the tax is 5%.

Tax is withheld at 10% on payments for technical services.

Social contributions

Employers have to pay social contribution on employees' remuneration at the rate of 14.5%, employees - at the rate of 5.5%.

Property Tax

Local property taxes are paid depending on the size of the property.

Real estate transfer tax

On the transfer of real estate, tax is usually paid at rates ranging from 1.75% to 2.5%.

Agreements for the avoidance of double taxation

Andorra has entered into the following tax information exchange arrangements:

6 DTCs: Spain, Liechtenstein, Luxembourg, Malta, UAE, Portugal.

24 TIEAs: Argentina, Australia, Austria, Belgium, Czech Republic, Denmark, Faeroe Islands, Finland, France, Germany, Greenland, Iceland, Italy, Liechtenstein, Monaco, Netherlands, Norway, Poland, Portugal, Republic of Korea, San Marino, Spain, Sweden, Switzerland.

Currency control

There are no currency controls in the country.

    Taxes of Andorra

    Min. rate for corporate tax 10%
    Capital gains tax Regular rate
    VAT 4.5%
    Withholding tax 0%/5%/10%
    Exchange control No
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