Taxation in Andorra, Andorra Business Income and Rates - Allo' Expat Andorra
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Taxation in Andorra

Business Taxation

In Andorra there are no taxes on profits, dividends or income; there is no capital gains tax, no withholding tax and no sales tax. The taxes impinging on companies are business license fees, social security contributions,and property taxes. Corporate entities pay registration fees to the Government.

Following the introduction of the Foreign Investment Law in November 2008, 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.

Business Licence 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 licence, 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 €670. A holding company, not involved in business activity as such, does not require a trading licence.

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 €200 to €400 per month.

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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