The Income Tax for non-tax residents in Andorra is a direct tax that is applied to people or companies that obtain income in Andorra and who do not reside in Andorra.
The IRNR must be paid by companies and people who do not reside in Andorra and who have obtained income in Andorra.
The amount of the tax to pay in general is 10% of the amount of the invoice paid.
In the case of income paid by way of tax fees, it is 5% of the invoice paid and for reinsurance 1.5%.
Andorran companies that pay income to companies or people who do not reside in Andorra in relation to services performed in Andorra must comply with the following obligations:
- Withhold the amount resulting from applying the tax rate to the invoice amount as a tax to enter.
- Present to the Ministry of Finance the declaration of withholding and payment on account of the tax during the months of April, July, October or January immediately after the withholding.
In the case of double taxation agreements, it would have to be reviewed on a case-by-case basis whether this tax is applied or not.
The Personal Income Tax is a direct tax that is levied on the income obtained by natural persons who are considered tax residents in Andorran territory.
The world income obtained by the taxpayer is taxed.
Taxpayer is any natural person in which one of the following circumstances occurs:
- Live more than 183 days in the Andorran territory during the calendar year;
- That the main nucleus of its economic activities or its economic interests reside in Andorra, directly or indirectly.
The Personal Income Tax levy:
- Income from work;
- The income from real estate capital;
- The income from economic activities;
- Income from movable capital;
- Capital gains and losses.
The tax rate is 10%. However, the law provides for reductions, which implies that the equivalent rate is 5% for incomes between 24,000 euros and 40,000 euros.
The taxpayer must present the Personal Income Tax declaration between April 1 and September 30 of the year following that which is the subject of the declaration.
The General Indirect Tax is an indirect tax that is levied:
- Deliveries of goods and services rendered in Andorran territory by businessmen or professionals for consideration, on a regular or occasional basis, in the course of their economic activity;
- Importing goods.
Natural or legal persons who carry out economic activities are not considered business owner with respect to this tax (except if they expressly express their wish to be so) when they make deliveries of goods and services that do not exceed the annual amount of 40,000 euros.
The general tax rate is 4.5%.
The taxpayers must present the tax settlement periodically based on the annual turnover for the set of activities carried out the previous year.
- Annual turnover of less than 250,000 euros, biannual presentation: July and January;
- Annual turnover of less than 3,600,000 euros, quarterly presentation: April, July, October and January;
- In other cases, monthly presentation.
The Corporation Tax is a direct tax that is applied to the profits obtained by legal entities.
The accounting result is adjusted to arrive at the tax base.
The general tax rate is 10%.
The tax quota is the amount resulting from applying the tax rate to the tax base.
Deductions are established for:
- Eliminate double internal and international taxation;
- Creation of jobs;
- Investments.
In September, taxpayers must make an advance payment of the settlement corresponding to the tax period that is in progress on the first day of this month.
The advance payment is calculated applying the percentage of 50% on the settlement fee of the previous year.
Negative tax bases can offset the positive tax bases for tax periods ending in the subsequent ten years.
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