• Andorra Tax System

  • TAX RESIDENCY

    Tax Residency

    A company is considered to be tax resident in Andorra if it is incorporated in Andorra or if its central management and control is exercised in Andorra.

  • TAX ADMIN

    Taxable Period

    The taxable period of a company in Andorra is its accounting year.

    Tax Returns

    A company in Andorra needs to file a tax return every year, 7 months after the end of its tax year.

  • CORPORATION TAX

    Corporation Tax

    The corporation tax rate in Andorra is 10%.

  • DIVIDENDS

    Dividends from Foreign Investments

    Dividends from foreign investments are exempt under corporation tax if the company has a 5% participation for a period of last 1 year.

    Dividends from Local Investments

    Dividends from local investments are exempt under corporation tax if the company has a 5% participation for a period of last 1 year.

    Withholding Tax on Dividends

    There is no withholding tax on dividend payments from an Andorran company to its foreign shareholder.

  • INTEREST

    Interest Income

    Interest income in Andorra is taxable under corporation tax at the rate of 10%.

    Interest Expense Deductibility

    Interest expense is tax deductible.

    Withholding Tax on Interest

    Andorra does not levy any withholding tax on interest payments to foreign recipients.

  • ROYALTIES

    Royalties

    Royalty income in Andorra is taxable under corporation tax at the rate of 10%.

    Royalty Expense Deductibility

    Royalty expense is generally tax-deductible as a business expense if incurred wholly and exclusively for the purposes of the trade.

    Withholding Tax on Royalties

    Andorra levies a 5% withholding tax on royalty payments to foreign recipients.

  • TAX LOSSES

    Ordinary Tax Losses

    Ordinary tax losses in Andorra can be carried forward for 10 years.

    Carry back of ordinary losses is not allowed.

  • CAPITAL GAINS

    Disposal of Shares by Foreign Shareholder

    The profit on disposal of an Andorran company by its foreign individual shareholder is exempt from tax in Andorra.

    The profit on disposal of a Andorran company by its foreign corporate shareholder is exempt from taxation in Andorra provided that the participation exemption criteria are met.

    Capital Gains

    Capital gains in Andorra are taxed under corporation tax at the rate of 10%.

    Capital Losses

    Capital losses can be set-off against taxable profits.

  • PARTNERSHIPS

    Partnership Profits

    Partnerships are treated as a non-profit entities for tax purposes.

    The profits are taxed in the hands of each partner.

  • BRANCHES

    Branch Profits

    A Branch is treated in the same manner as other types of companies in Andorra.

    There is no tax in Andorra on the remittance of the profit of an Andorran Branch to its foreign head office.

  • STAMP DUTY

    Stamp Duty

    Andorra does not levy stamp duty.

  • VAT

    VAT Standard Rate

    The standard VAT rate in Andorra is 4.5%.

    VAT Reduced Rate(s)

    The reduced rates of VAT are 9.5%, 1% and 0%.

    VAT Registration Threshold

    The VAT registration threshold in Andorra is €40,000.

    VAT Filing & Payment

    VAT filing and payment in Andorra varies according to turnover as follows:

    • Up to €250,000 - Semi-annually
    • €250,000 - €3,600,000 - Quarterly
    • Over €3,600,000 - Monthly

Compare Andorra to other jurisdictions and see the difference in corporation tax rates, tax residency requirements, VAT rates, capital gain taxes, etc.

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