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Andorra’s tax system: a brief overview of the country’s taxes and fees

Andorra has been the preferred domicile of the wealthy, primarily Spanish and French. This is due to its advantageous tax system, i.e., Andorra’s taxes. For many years, the Principality of Andorra was regarded as a tax haven because no tax was paid at the time. However, Andorra was removed from all OECD black lists (particularly after 2018) after the implementation of the current tax system, hence there is no European entity that can consider Andorra a tax haven, contrary to popular belief. Andorra has a taxation system in place.

Along with the impuesto sociedades Andorra, this is one of Andorra’s most intriguing levies. This is the tax that benefits Andorran taxpayers the most. Residents of Andorra are required to pay all income earned elsewhere in the globe. That is, every income earned by the taxpayer in multiple countries must be declared in this tax and paid in the appropriate tax. It is crucial to note that not all Andorrans are required to pay this tax, and the legislation stipulates that persons (IRPF) must earn more than € 24,000 per year in order to pay this tax, while the first € 24,000 is fully exempt. As a result, only those who make more than € 24,000 per year in earned income or who get more than € 3,000 in movable capital income must pay income tax in Andorra.

When comparing the two taxes, it is evident that the personal income tax in Andorra is far more appealing than the personal income tax in Spain; this is mostly due to the tax rates that both taxes are subject to. The final fee of this tax in Spain is determined by two fees: the regional fee and the state fee. The total of these two fees will be the amount due to the Tax Agency by the individual in issue.

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