Andorra residency

[Konstanz]

Any Andorra residents here?

I have read that you are exempt from IRPF ( The personal income tax of 10%) and are not required to make any declaration whatsoever if you are not in Andorra for more than 183 days per year and there are no plans as yet to ask you to sign a declaration on your movements. In effect the period between being here 90 days as required for passive residency and 183 days for fiscal residency is a grey area.

So in fact you can be Andorra resident and pay no tax.

Is it true?

 

[glengoolie]

isn't that the principle of perpetual traveller? i always thought one should have single domicile where to declare taxes(ideally 0% tax country, like UAE) and then simply travel enough to avoid the 183 day rule.

 

[Konstanz]

Andorra is in continent Europe and not Sharia law country. It's big difference comparing to UAE.
You can spend time in Andorra, spend time in nearby Spain, France. Rest time you can travel.

 

[IrinaVinograd]

Any Andorra residents here?

I have read that you are exempt from IRPF ( The personal income tax of 10%) and are not required to make any declaration whatsoever if you are not in Andorra for more than 183 days per year and there are no plans as yet to ask you to sign a declaration on your movements. In effect the period between being here 90 days as required for passive residency and 183 days for fiscal residency is a grey area.

So in fact you can be Andorra resident and pay no tax.

Is it true?

Hello! Yes, it's true. You can be Andorra resident but if you're out of Andorra 183+ days you can be tax residence in other country. Herewith, if you're a passive resident, who is obliged to spend minimum 90 days in Andorra, you can self-declare a tax resident status as well voluntary and pay taxes here.
Tax rates are quite attractive by the way. That was one of the reason we moved here.

 

[Konstanz]

Hello! Yes, it's true. You can be Andorra resident but if you're out of Andorra 183+ days you can be tax residence in other country. Herewith, if you're a passive resident, who is obliged to spend minimum 90 days in Andorra, you can self-declare a tax resident status as well voluntary and pay taxes here.
Tax rates are quite attractive by the way. That was one of the reason we moved here.

So, I understand you get tax residency certificate even if you stay less than 180 days in Andorra and you are not obligated to pay any tax?
How is the life there. It's not too boring?

 

[IrinaVinograd]

So, I understand you get tax residency certificate even if you stay less than 180 days in Andorra and you are not obligated to pay any tax?
How is the life there. It's not too boring?

Not completely so:
- when you get your living permit you automatically get personal tax ID number
- active residents (who are obliged to spend 183+ days in Andorra) = tax residents, they should pay taxes here and file yearly tax declaration
- passive residents can choose depending on their actual tax residence and goals. If they would like to pay taxes here they apply for tax residency certificate which means local taxation rules and yearly tax declaration. If you pay taxes abroad you can't get tax residency certificate but still has tax ID without any tax obligations.
I hope it's more clear now.

Life here is super quite, normally to entertain we go to Barcelona or other destinations. Amazing nature, good ecology, plenty of different sport activities, great place for school age kids. We love yo be here.

 

[Piano]

Not completely so:
- when you get your living permit you automatically get personal tax ID number
- active residents (who are obliged to spend 183+ days in Andorra) = tax residents, they should pay taxes here and file yearly tax declaration
- passive residents can choose depending on their actual tax residence and goals. If they would like to pay taxes here they apply for tax residency certificate which means local taxation rules and yearly tax declaration. If you pay taxes abroad you can't get tax residency certificate but still has tax ID without any tax obligations.
I hope it's more clear now.

Life here is super quite, normally to entertain we go to Barcelona or other destinations. Amazing nature, good ecology, plenty of different sport activities, great place for school age kids. We love yo be here.

do they check the minimum 90 day period for passive residence ?

 

[IrinaVinograd]

do they check the minimum 90 day period for passive residence ?

In practice, no. And no stamps on a border with EU.
But note, that once appliying for the residency permit you sign a commitment to stay at least 90 days here.
In reality only active residents are subject to some control.

 

[Piano]

In practice, no. And no stamps on a border with EU.
But note, that once appliying for the residency permit you sign a commitment to stay at least 90 days here.
In reality only active residents are subject to some control.

Do they expect you to rent a place for those 3 months or stay in a hotel ?
staying with you for 3 months would also satisfy the requirement ?

 

[Konstanz]

Not completely so:
- when you get your living permit you automatically get personal tax ID number
- active residents (who are obliged to spend 183+ days in Andorra) = tax residents, they should pay taxes here and file yearly tax declaration
- passive residents can choose depending on their actual tax residence and goals. If they would like to pay taxes here they apply for tax residency certificate which means local taxation rules and yearly tax declaration. If you pay taxes abroad you can't get tax residency certificate but still has tax ID without any tax obligations.
I hope it's more clear now.

Life here is super quite, normally to entertain we go to Barcelona or other destinations. Amazing nature, good ecology, plenty of different sport activities, great place for school age kids. We love yo be here.

It does not make sense. Why would anyone take "passive investor" residency, if you don't get certificate of tax residence. I understand if you stay less than 180 days in Andorra being passive residence, you can still get tax residence certificate, but don't need to declare or pay tax
You can spent 179 days in Andorra. Rest of days you can spend traveling around the world - it does not mean you have to pay tax elsewhere. Andorra is just your MAIN / BASE residence.
No one would take this complicated path of Andorra passive residence if you don't get proper documentation or if you have to pay tax. I don't talk about whose moving there to work or live 180+ days

They are now building nice new projects in a middle of mountains far away from any place: New Developments | Andorra Sotheby's International Realty
Who would put these moneys there if you need to pay tax

 

[IrinaVinograd]

yes, you should have a long term rent contract in order to get a residence permit or buy some real estate. Without this proof - no chance.
At the same time, you can rent it out for short term while you're not here.
Mine doesn't work in this case - sorry

Passive residents should invest 350k (real estate, local bank deposit etc) during 6 months after getting a permit + 50K as a deposit on special government account for the duration of the permit. Bith amounts are refundable.

 

[IrinaVinograd]

It does not make sense. Why would anyone take "passive investor" residency, if you don't get certificate of tax residence. I understand if you stay less than 180 days in Andorra being passive residence, you can still get tax residence certificate, but don't need to declare or pay tax
You can spent 179 days in Andorra. Rest of days you can spend traveling around the world - it does not mean you have to pay tax elsewhere. Andorra is just your MAIN / BASE residence.
No one would take this complicated path of Andorra passive residence if you don't get proper documentation or if you have to pay tax. I don't talk about whose moving there to work or live 180+ days

They are now building nice new projects in a middle of mountains far away from any place: New Developments | Andorra Sotheby's International Realty
Who would put these moneys there if you need to pay tax

I didn't say that you can't get a tax residence certificate. You definitely can do it as soon as you have your permit.
But if you're a tax resident here you're obliged to file your tax declaration. Otherwise I think it doesn't work nowadays. Everybody asks your tax declaration so the point is to choose where it's better to pay, no? It seems that paying taxes nowhere doesn't work anymore. Probably I'm mistaken. I'd like to.
By the way, 10% is a maximum, you have some income types/volume of income with 0% to 5%.
And no double taxation even if there's no DTT with some particular country.

Yep, these projects are really amazing.

For the last year there were much more passive residence came here even despite the covid issues, I assume it depends on your "home tax rates" and rules.

 

[orangekangaroo]

Any Andorra residents here?

I have read that you are exempt from IRPF ( The personal income tax of 10%) and are not required to make any declaration whatsoever if you are not in Andorra for more than 183 days per year and there are no plans as yet to ask you to sign a declaration on your movements. In effect the period between being here 90 days as required for passive residency and 183 days for fiscal residency is a grey area.

So in fact you can be Andorra resident and pay no tax.

Is it true?

Yes I can concur.

 

[freegeek]

Not completely so:
- when you get your living permit you automatically get personal tax ID number
- active residents (who are obliged to spend 183+ days in Andorra) = tax residents, they should pay taxes here and file yearly tax declaration
- passive residents can choose depending on their actual tax residence and goals. If they would like to pay taxes here they apply for tax residency certificate which means local taxation rules and yearly tax declaration. If you pay taxes abroad you can't get tax residency certificate but still has tax ID without any tax obligations.
I hope it's more clear now.

Life here is super quite, normally to entertain we go to Barcelona or other destinations. Amazing nature, good ecology, plenty of different sport activities, great place for school age kids. We love yo be here.

are there border controls between Andorra- Spain and Andorra-France?

 

[Gediminas]

are there border controls between Andorra- Spain and Andorra-France?

Yes

 

[Allisgood]

are there border controls between Andorra- Spain and Andorra-France?

Never seen any pre-COVID.

 

[Sols]

are there border controls between Andorra- Spain and Andorra-France?

Andorra isn't part of Schengen so yes, there are border controls but inspections are sporadic. Think of it more like customs control than immigration border controls. Because of the lower VAT on for example alcohol and tobacco, Spanish and French border checks are mostly focused on people crossing over and bringing more than permitted allowances of such items home.

 

[Konstanz]

There is no stamps on exit/enter Andorra. I think this was more a question if they "track" people movements.
So , in this sense you can enter/exit Andorra without being tracked

 

[JustAnotherNomad]

Haven't we discussed this a million times? Getting a tax residency certificate from country A doesn't mean that country B cannot also tax you.
In fact, country B can even also claim you as a tax resident.

 

[orangekangaroo]

I am in Andorra visiting for a bit. Rumours are that the requirements for Andorra passive residency will go up pretty soon from 400k euros to 700k euros investment.