Andorra Bank Account
Tourism, the mainstay of Andorra's tiny, well-to-do economy, accounts for roughly 80% of GDP. An estimated 9 million tourists visit annually, attracted by Andorra's duty-free status and by its summer and winter resorts. Andorra's comparative advantage has recently eroded as the economies of neighboring France and Spain have been opened up, providing broader availability of goods and lower tariffs. The banking sector, with its "tax haven" status, also contributes substantially to the economy. Agricultural production is limited - only 2% of the land is arable - and most food has to be imported.
Find out more about opening a Andorra bank account.
1) Presentation of the tax system in Andorra:
The Law of 19 December 1996 which governs the Andorran fiscal system establishes the general framework of taxes and organises the sectors that are subject to tax. Although this law establishes the framework for the implementation of tax related legislation, it does not define the different categories of taxes existing in the Principality of Andorra.
This law stipulates that the different categories of national taxes in Andorra can only be established by means of legislation enacted by the Conseil Général (the Andorran Parliament).
On the other hand, regional bodies, "Municipalities" are competent to develop and regulate taxes at local level (local taxes).
At the current time in the Principality of Andorra there is no system of direct taxation on the income of natural persons, on trading profits or on assets.
However, the government is planning to introduce a inheritance tax, an indirect tax on services provided as well as an ecotax to protect the environment.
The Andorran system is based on indirect taxes which represent approximately 12.6 % of the Gross National Product.
2) The scope of national taxes:
. The Law on the Taxation of Indirect Goods (IMI) establishes a general system of indirect taxation on the production, development and importation of all products (tangible property) located in Andorra, that is to say for goods included in chapters 1 to 97 of the harmonised Community system. The law stipulates four different rates which apply on the value of goods. These rates vary from 1 to 12 % according to the products; the majority of products are taxed at 4 %.
In addition to this amount, there are other taxes according to the type of products in question, such as an excise tax, which applies solely to agricultural products.
. The Law on Excise Taxes of 30 December 1985 establishes an excise tax which, since the Trade Agreement signed in 1990 with the European Community, applies only to the importation of agricultural products which are included in chapters 1 to 24 of the harmonised system. The rate of this tax varies from 2 to 60 % according to the goods.
. There are other government imposed taxes which apply to:
- electricity and telephone bills
. Moreover, people carrying on a business activity are subject to the payment of a flat-rate tax, payable when they register on the Trade Register and then subsequently each calendar year between1st April and 30 June.
- people owning a Société Anonyme (a Public Limited Company) or a Société à Responsabilité Limitée (a Private Limited Company) registered on the Corporate Register,
People who are registered on the Corporate Register must pay a tax of 330 euros at the time of registration and subsequently a tax of 670 euros every calendar year in the case of a Private Limited Company.
Other than these taxes, people wanting to create a company must pay what corresponds to a Registration Tax.
The professions must pay a tax of 330 euros annually, from the third year following their registration as a member of one of the professions.
. The Law on legal taxes of 20 December 1995, established a system of taxation by way of excise stamps for court proceedings.
. Finally, the Law of 28 November 1996 taxes authorised bingo halls.
. The law on transfers of assets: (applicable to assets located in Andorra)
The Law of 29 December 2000 regulates indirect tax imposed on transfers of real estate inter vivos, as well as on the creation or transfer of rights in rem onassets located in Andorra.
This law also applies to:
The amount of taxes to be paid by the acquirer or by the persons in whose favour a right in rem is created or transferred is as follows:
3) Local taxes:
The local authorities, the "Municipalities", of each parish are authorised by the Parliament to apply a general tax, and also to establish, administer and apply additional taxes.
Even if tax regulations are not unified between the different parishes, it is possible to identify the most important taxes in this regard:
1. Service taxes: taxes on hygiene, lighting services, drinking water, urban contribution etc.
Information by www.andorra.be
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