Guide to Corporate Tax in Andorra

Andorra is increasingly becoming a preferred destination for entrepreneurs and businesses seeking to optimize their tax situation, thanks to its low corporate tax rates, tax incentives, and transparent fiscal policies. The corporate tax regime in Andorra is highly favorable for businesses of all sizes and sectors, making it a competitive jurisdiction for international trade and investment.

Key Aspects of Corporate Taxation in Andorra:

1. Corporate Income Tax Rate: Andorra’s corporate tax rate is set at 10%, one of the lowest in Europe, which is highly attractive for businesses looking to maximize profitability.
2. Tax Incentives for International Business: Companies engaged in international activities or providing services abroad may benefit from tax exemptions or reduced tax rates. This makes Andorra particularly appealing for global companies, consultants, and digital entrepreneurs.
3. Capital Gains Tax: Andorra does not levy capital gains tax on the sale of assets, including real estate and shares, which provides a major advantage for companies looking to restructure or liquidate assets.
4. Dividend Taxation: Dividends paid by an Andorran company to shareholders are subject to a 0% tax rate, provided that the shareholder is a tax resident of Andorra or a country with which Andorra has a double taxation treaty.
5. Tax Deductibility: Business expenses, including salaries, rent, and other operational costs, are fully deductible from taxable income, which can significantly reduce the overall tax burden.
6. VAT (Value Added Tax): Andorra has a low VAT rate of 4.5%, making it one of the lowest in Europe. This is highly beneficial for businesses involved in trading goods and services, as it reduces the cost of doing business.
7. Withholding Tax: There is no withholding tax on interest or royalties paid to non-residents. This can be beneficial for companies engaged in cross-border transactions, particularly in financing or intellectual property agreements.

Corporate Tax Breakdown

How Axior Global Can Help with Corporate Taxation in Andorra

Axior Global offers comprehensive tax advisory services to help your business navigate the corporate tax landscape in Andorra. Whether you are setting up a new company or optimizing your existing tax strategy, our team of experts can provide the guidance you need to maximize your tax efficiency.

Here’s How We Can Assist You:

1. Tax Optimization: We will help you design a corporate structure that minimizes your overall tax liability while ensuring full compliance with Andorran tax laws.
2. Incorporation Services: Axior Global can guide you through the process of establishing a business in Andorra, ensuring that you select the appropriate legal structure for tax efficiency (e.g., Sociedad Limitada or Sociedad Anónima).
3. Cross-Border Taxation: For businesses with international operations, we provide expert advice on double tax treaties, transfer pricing, and international tax planning, ensuring that your global operations are tax-efficient.
4. Tax Filing and Compliance: We manage your company’s tax filings, ensuring that you meet all compliance requirements, including submitting annual tax returns and other necessary documentation.
5. VAT and Other Indirect Taxes: If your business deals with goods and services, we provide guidance on VAT registration, ensuring that your business complies with Andorra’s VAT laws and takes advantage of the low 4.5% rate.
6. Tax Incentives and Exemptions: We can help you identify and take full advantage of available tax exemptions and incentives for international businesses or businesses in certain sectors such as technology or finance.
7. Exit Strategy: If you’re looking to exit or restructure your business, Axior Global provides strategic advice on capital gains, asset sales, and reinvesting profits in a tax-efficient manner.