The Andorran tax system is known for being friendly for individuals and companies. But surprisingly, there are many people who still mistakenly associate the Principality of Andorra as a tax haven, but it is not. Not at all. Andorra stopped being a tax haven several years ago.
Even so, millions of people still consider Andorra to be a tax haven because the country where they are currently living is a true tax hell.
They know what about that
There I give them every reason. If you live in Spain or France, you will know what I am talking about.
Compared to other much larger countries, Andorra’s tax system is quite simple. Here you have a summary of the types of taxes, sections and percentages:
- Personal income tax: 0-10%
- Tax on company profits: 10%
- People earn € 24,000 per year, they have a tax rate of 0%. But the tranche from € 24,001 to € 40,000 per year are subject to a 5% tax. For those people who earn more than € 40,000 per year, they have a 10% tax.
- Married couples where the combined total income is less than € 40,000 have a tax rate of 0%. So, above this figure, it is taxed at 10%.
- The IGI (sales tax): 4.5% In Spain it is known as IVA, in France as TVA and in Anglo-Saxon countries as VAT.
- There are no wealth taxes.
- There is no donation tax.
- There is no inheritance tax.
- Real estate:
- The capital gains tax on Andorran real estate: 0-15%
- If you sell within the 1st year: 15%
- If you sell within the 2nd year: 13%
- Sell in the 3rd year: 10%
- Sell in the 4th year: 9%
- From year 4 inwards, the rate decreases 1% per year, which means that the property is tax-free after 12 years of ownership.
If you want more up-to-date and in-depth information on official taxation, you can contact the Government of Andorra.