Do you want to know how you can operate under the Andorran tax system without being a natural person or a company? Look no further, because we can educate you about the tax system in Andorra and its advantages.
The country’s previous tax system was not effective. A more solid system was established due to issues related to taxes and inconveniences which had caused a low point in terms of visitors, since they had also found themselves caught in the economic crisis.
Currently, taxation in Andorra is divided between natural persons and companies.
ADVANTAGES FOR NATURAL PERSONS
- Firstly, people who live in Andorra enjoy the advantages of very low income tax, those who become residents also get the same benefits
- There is no tax on donations or inheritance, which facilitates the transfer of assets between individuals
- The general VAT rate is 4.5%, and 1% on goods and services related to health, education, culture, food and rentals
ADVANTAGES FOR COMPANIES
Many entrepreneurs tend to complain that, despite paying taxes, they do not receive many benefits in return. However, this is not the case in Andorra, thanks to the following advantages:
- A maximum rate of 10% for corporation tax and 4.5% for IGI (VAT) on both goods and services
- The company portion of the contribution rate for a salaried or assimilated person is 15.5%, giving clients comfort and security
- Social security is available for residents who need coverage for healthcare and the funds assigned to them as pension
WHY IS THE TAX SYSTEM IN ANDORRA IMPORTANT?
Many people do not realise the importance of operating under Andorra’s taxation system, but it is significant in terms of the benefits that can be acquired by both natural persons and the company they are managing.
Taxation is part of an agreement between countries where the idea is to establish official links between companies which will help facilitate operations and, of course, provide stronger legal protection, which relies heavily on the company, while also establishing how best to safeguard all of their assets.