Hide income or assets abroad is becoming increasingly difficult. Tax evaders have it very complicated because the exchange of fiscal information is something that is being generalized worldwide. Andorra wanted to join this trend and in February 2016 signed an agreement with Brussels to prevent tax fraud. Thus, since January 1, the principality and the EU exchange tax information automatically, although the first communication will be made in 2018.
Previously Andorra provided this type of information as long as it received a specific request, however, from now on, this will be done annually automatically. In order to comply with the agreement, Andorran financial institutions will need to know the fiscal residence of their clients. All accounts opened as of January 1, 2017 will already be requested the necessary information to be able to send the data next year, for the accounts existing before that date, an adaptation period has been established.
It distinguishes between accounts that exceed one million dollars and those that do not. In the case of the former, the first communication must be made on July 30, 2018, while for the latter, the term is extended to June 30, 2019. In the case of companies, those that do not exceed 250,000 euros, will not be affected, while for those that exceed this amount the communication will take place on June 30, 2019. The information exchanged will include: tax identification number, name, address, date of birth, balance of accounts and income derived from the sale or transfer of assets. Accounts with a balance less than one thousand euros will not be included.
Faced with this new situation of taxation in Andorra, the principal banks have the challenge to retain and attract new customers. The experience of years in private banking and closeness (especially in the case of Spain) will be its most important assets.