In Andorra societies have an obligation, as in neighboring countries, of paying corporate tax. The big difference is that corporate tax in Andorra is really small compared to its neighbors. The 33% of France or 25-30% of Spain are huge next to 10% of Andorra.
When classifying the tax it has direct character and affects income of legal persons (companies) for obtaining income (profits). The standard rate of corporation tax for companies in Andorra, is set at the 10% we mentioned earlier. It includes, among other things, deductions and bonuses for creating jobs and making investments.
Besides the general type, there are a number of special tax regimes that reduce by 80% the tax base tax, so you will end paying only 2% of the profits of the activity. These special arrangements apply to companies engaged in:
- International Trade
- International exploitation of intangibles
- Financial intragroup.
The requirements to qualify for any of these schemes are:
- Have a local of 20m2 affected to the activity
- Have a person hired part-time
- Perform the request to the Government
In the case of international trade, it further requires that the goods DO NOT enter Andorran territory. Another special regime is the of SICAVs and Holding one, with an effective taxation rate of 0%. This deductions can make taxation almost nonexisten for many companies that can be interested in work from Andorra.
If we add the 0% tax as an individual in the case of dividends from a company owned by us if we are residents of the country, is clear the savings that a company based in Andorra haves. In the case of, for example, a company acting as an intermediary in the sale of goods, taxation is really almost nonexistent. Is the same case if we want to exploit intellectual property in our possession or simply make a financial box between accounts within a group of companies.