Lucas Fox guide to residency and tax in Andorra

Personal: 

• Become resident (permanent resident stays more than 183 days annually) by acquiring work permit (usually only issued to EU or EFTA residents only if another Andorran is not available for the job. Not issued to self- employed foreigners)  OR
• Passive Residence Permit-
  • 200 issued annually
  • Not permitted to work or carry out professional activity in Andorra.  
  • Show minimum annual income of 24,000 euros for the head of the family and 6,000 euros for each dependent family member
  • Prove good conduct in their previous domicile
  • Produce health insurance and a pension plan
  • Own or rent a house or apartment in the principality
  • Pay a non-interest-bearing deposit of 24,000 euros plus 6,000 for each dependant to the Government, which is refundable on departure
• Employees pay national insurance contributions
• Can only be self employed (sole trader) if have been resident for 10 years. No foreign business´ exist.
• Pension- need 960 points in pension system. Available from 65yrs. Minimum 150 Euros. Free health service with 500 points.

• No income tax, gift, inheritance or capital transfer taxes.
• Capital gains tax introduced 2007- sliding scale
• Municipal taxes on property.
• Customs duties on some imported goods- common external tariff of the EU
• Sales taxes on various classes of goods- single between 1-12%. Majority at 4%
• Withholding tax of 15% on returns on savings paid to citizens of Member States of the EU, of which 75% is remitted onwards to the States concerned (EU Tax Saving Directive)
• Excise tax- only for agricultural products.
• Property purchase tax of 1.25%

• No tax on profits, income or dividends.
• No capital gains tax, no withholding tax and no sales tax.
• Business licensing fees vary
  • sole traders- 640 Euros annually
  • partnership- 67% local ownership- 670 Euros annually
  • Societat Limitadad- 463 Euros annually with additional 670 if Registre de Comerc is needed
  • Societat Anonima- 1000 Euros annually with additional 670 if Registre de Comerc is needed
• Health and social security- employer pays 13% salary, worker 6-9%- typically employer pays all. Self- employed pay 18% salary
• Property taxes
  • Business renting its premises will be liable only for business rates
  • 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. Property Acquisition Tax of 2.5% of the agreed purchase price payable to the Government payable by the purchaser, separately from the payment to the seller.