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- ANDORRA
BUSINESS LICENSE FEES
- ANDORRA PAYROLL
TAXES
- ANDORRA SALES TAXES
- ANDORRA PROPERTY
TAXES
Until
very recently, there were no taxes
on profits, dividends or income in Andorra. The
taxes impinging on companies are business license
fees, social security contributions, property
taxes and sales taxes. Corporate entities pay
registration fees to the Government: see Types
of Company and Offshore
Legal and Tax Regimes for details of annual
fees payable depending on status.
Following
the introduction of the Foreign Investment Law
in November 2008 (see Offshore
Business Activities), the
government anticipated the adoption of two additional
laws. One is intended to establish a tax rate
on the profits of companies of between 5 and 10%.
The other will create a value-added tax of around
4% that will replace all of the existing indirect
taxes.
The
Taxation of Non-Residents Act, 2010, published
in late December 2010, came into force on 1 April
2011 and non-resident companies and individuals
will now be subject to tax on local-source income
at a rate of 10%.
The
introduction of a Value-Added Tax regime, to be
followed by the extension of the income tax regime
to resident individuals and corporations are forthcoming
subject to political stability. To phase out the
existing consumption tax, the Value-Added Tax
rate will be imposed on a broader spectrum of
goods and services, at an anticipated 5% rate.
A concessionary rate of 1% is expected to be available
on a number of healthcare goods and services;
on basic living essentials, such as rent and water;
and welfare goods and services.
Andorra Business License Fees
All
businesses in Andorra, if they are going to trade
in the principality, whether constituted as companies,
individual proprietorships of partnerships, need
to obtain a trading license, or in other words
to register for a particular type of trading,
and this must be done at the Registre de Comerc
in the commune (Comu) where they are based. The
annual cost of this registration is EUR670. A
holding company, not involved in business activity
as such, does not require a trading license.
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Andorra Payroll Taxes
There is a health and social security system in
Andorra known as the CASS (Caixa Andorrana de
Seguretat Social) which applies to all employees
of Andorran individuals or companies. The rates
of contribution are 13% of salary by the employer,
and between 5% and 9% by the employee. In practice,
the employer often pays the lot. Contribution
rates for non-employed persons range from EUR200
to EUR400 per month.
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Andorra Sales Taxes
Sales taxes, which apply to most products and
services, take the form of a purchase tax, paid
by the producer or supplier at the time of a sale,
and most commonly at 4%, although different rates
apply to some products. There are also excise
taxes, at varying rates.
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Andorra Property
Taxes
Property taxes are levied by the municipality
in which a business is located; a business renting
its premises will be liable only for business
rates; a business owning or constructing property
for its own use will pay taxes on the acquisition
of property and its construction in addition to
business rates. There is a Property Acquisition
Tax of 2.5% of the agreed purchase price payable
to the Government (that in turn passes on half
of this amount to the respective commune). This
is payable by the purchaser, separately from the
payment to the seller, at the Notary Public's
office at the time of the transaction. All communes
charge a small property rate in addition to the
local rates and services charges. Business rates
are charged on a square metre basis. There are
also small percentage charges on rental income.
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