A competitive tax system for individuals and businesses
The new Andorran tax framework has been approved by the OECD and represents the starting point for the development of agreements to prevent double taxation. DTAs have already been signed with France and Luxemburg, Spain and Portugal are to follow. The aim is to strengthen economic relations and to exchange tax information with a large number of countries. Andorra has a low indirect taxation (flat rate of 4.5%) and a very competitive direct taxation; key points are shown in the following charts.
- Companies in Andorra are taxed at a nominal rate of 10% on corporate profits.
- Deductions and allowances for the creation of jobs, investment in fixed assets and other factors.
- Reductions down to an effective rate of 2% applicable to companies with certain activities.
- Wealth management tools (such as a SICAV) that allow an effective tax rate between 0.5% and 1%
- Income taxation at a nominal rate of 10%.
- Employment income up to 24.000€ and movable assets income up to 3.000 € are exempt from tax. The next tranche of 16.000 € is exempt by 50%.
- Dividends from Andorran companies are exempt from tax
- No tax on net wealth, donations and inheritance.