Andorra offshore zone

Open: Andorra offshore zone

Until 2011, there were no taxes in Andorra for resident companies or other than modest annual registration fees, municipal rates, property transaction taxes, certain minor sales taxes and a sliding scale capital gains tax legislation introduced in 2007 providing for a corporate income tax on individuals, initially on non-residents, at a rate of 10% effective from April 1, 2011 and on non-resident companies and currently being taxed at the local source of income at a rate of 10%. Resident companies and individuals engaged in entrepreneurial activities are subject to 10% tax from January 2013 (5% in 2012).

Value-added tax regime came into force in January 2013 by phasing out the existing consumption tax, the value-added tax rate is imposed on a wider range of goods and services, at a rate of 4.5%. A reduced rate of 1% is available on food, books, newspapers, and magazines. The 0% rate applies to a range of medical goods and services; for basic necessities such as rentals; and welfare goods and services.

Andorran bank accounts are very secret

A home for money, Andorra is hard to beat. Banks are solid and there are no capital or foreign exchange controls. Numbered accounts are said to be known only to you, your banker and God. Strict anti-money laundering legislation stops criminal activity but rules out tax evasion, which is not a crime in Andorra. In June 2004, however, Andorra was forced to agree to the taxation of savings by the EU Directive, and from July 2008, introduced an income tax of 20%, which rose to 35% in July 2011, on return on savings paid to citizens of the State- EU members, of which 75% will be transferred for years by states. In March 2009, the Andorran government announced that it would cooperate with the principles of the OECD by reaching an agreement on the exchange of tax information, and in February 2010, was placed on the "white list" of the OECD. At the time of writing, Andorra has signed 20 tax information exchange agreements.