Andorra is an ideal place both for multinationals and SMEs. The law sets the corporate tax maximum at 10% and it can be reduced to 2% depending on the type of company. This makes it one of the lowest in Europe.
Creating a company in Andorra or establishing the headquarters of a company in the principality is an option to value for many.
Andorran legislation has developed a complete framework of taxation on individuals and companies. Here below you will find the most common taxes that you will have to pay once settled down in the country.
Further information about Andorran social insurance record is available at the official tax office of the Andorran Government
Departament de Tributs i de Fronteres
Baixada del Molí, 26
(next to Andorra Television)
AD500 Andorra la Vella
VAT in Andorra is the lowest in Europe. Its general rate is 4.5%, being reduced to 1% in goods and services related to health, education, culture, food and rentals, the super-reduced rate of 0% (e.g., hospital services, social assistance, education); the special rate of 2.5% (e.g., certain transports and certain ticket sales); and the increased rate of 9.5% (financial services).
This means that the VAT in Andorra is much smaller than its neighbouring countries, France and Spain, with 20 and 21% respectively.
There are three different ways to return the VAT:
In the first case, the tax refund is produced in full, regardless of the percentage, but you must handle the process himself. Once the purchase has been made, you must request the Tax Free service and obtain the invoice with the Taxes correctly broken down. From here, you will have to go to customs and claim the seal as the products have been introduced in the Principality. Once certified, the final step is to redirect the sealed invoice to the commerce or supplier where the product was acquired and, this one, will have 15 days to return the corresponding amount.
In the second case, the service is faster and more convenient but the amount of money returned is less. This time, the store facilitates the specific Tax Free model that, after receiving the seal, and it can be charged to the Principality through the financial entity Crèdit Andorrà or through any of the various authorized entities (Premier Tax Free, Global Refund, Innova Tax Free, Travel Tax Free, Comercia Global Payments or La Caixa, among others). In this case, you might not receive the full amount of money.
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