Is Andorra a tax-efficient jurisdiction for EU citizens?

[saintjohnny]

Just wondering if anyone has experience moving to Andorra and becoming a tax resident there?

I'm mainly attracted to the proximity to France and Spain for play plus the "low" tax rate and maybe (who knows?) the people I could network with while there.

I believe the effective tax rate is 10% but some famous YouTubers from Spain are paying way less than that?

Any info is helpful. Thanks for your help. I appreciate it.

 

[Konstanz]

Andorra has 10% income tax. So, it's not tax-free.
Also if you move as Spanish citizen to tax heaven, I think you remain Spanish tax resident for 5 years:
https://www.oecd.org/tax/automatic-...istance/tax-residency/SPAIN-Tax-Residency.pdf

 

[CaptK]

Andorra only works for Non Spanish and French residents.

 

[FreeBit]

EUSSR (sPain) citizen wondering if anyone has experience moving to Andorra and becoming a tax resident there?

I'm mainly attracted to the proximity to France and Spain for play plus the "low" tax rate and maybe (who knows?) the people I could network with while there.

I believe the effective tax rate is 10% but some famous YouTubers from Spain are paying way less than that?

Any info is helpful. Thanks for your help. I appreciate it.

Depends on what you're looking for.
If you're from spain, be ready to get an inspection from hacienda's friends.
- You need to be there 183days.
- They'll check your criminal background before accepting you
- you need to create a real company with real activity, or get a job or invest 400k€ in the country.
- They'll ask for your tax reports of the past 3 years before letting you open a bank account
- it takes close to 3 months to create the company that you need to be considered tax resident. So you need to hurry up

 

[FreeBit]

Andorra only works for Non Spanish and French residents.

Not true, it is indeed full of spanish people

 

[FreeBit]

Andorra has 10% income tax. So, it's not tax-free.
Also if you move as Spanish citizen to tax heaven, I think you remain Spanish tax resident for 5 years:
https://www.oecd.org/tax/automatic-...istance/tax-residency/SPAIN-Tax-Residency.pdf

Andorra is not a tax heaven, therefore that doesn't apply

 

[orangekangaroo]

Having lived in Andorra, there are 2 types of residency. Active, you need to setup a company and stay 183 days (policed). Passive 400k investment in bonds or real estate. 90 day stay sufficient (not policed). Tax is only due when you stay 183 days or more. Good holding structure 0% withholding on Divi in and out. You can receive at 0%

Also where a DTT is not in place and profits are taxed at a rate of 4% or higher no additional tax is due in Andorra.

Cap gains from trading where you own less than 10% of shares is not taxed.

Hard place to run an international business from. Andorran residency scares of a lot of international banks. Local banks charge a fortune for international transfers and are scared to death of any transaction since the BPA scandal.

PayPal to Andorra banks does not work.

Quality of life good if you like skiing or outdoors. Expensive to rent or buy property. Too much low end property and not enough of the type expats like.

 

[bizniz]

Oranngekangaroo is absolutely correct. And Andorra is full of expats from Spain and France who do not pay Spanish/French taxes It works for youtubers and that is the whole reason it just attracted attention in the Spanish media.

The only thing is like most other places, paper residencies don't work any more. You cannot live in Spain and pretend to be in Andorra.

 

[saintjohnny]

Having lived in Andorra, there are 2 types of residency. Active, you need to setup a company and stay 183 days (policed). Passive 400k investment in bonds or real estate. 90 day stay sufficient (not policed). Tax is only due when you stay 183 days or more. Good holding structure 0% withholding on Divi in and out. You can receive at 0%

Also where a DTT is not in place and profits are taxed at a rate of 4% or higher no additional tax is due in Andorra.

Cap gains from trading where you own less than 10% of shares is not taxed.

Hard place to run an international business from. Andorran residency scares of a lot of international banks. Local banks charge a fortune for international transfers and are scared to death of any transaction since the BPA scandal.

PayPal to Andorra banks does not work.

Quality of life good if you like skiing or outdoors. Expensive to rent or buy property. Too much low end property and not enough of the type expats like.

Ugh, all of that sounds overly complicated and not temping at all. I guess I'll stick with Cyprus. Thanks for your response.

 

[nobel]

About "PayPal to Andorra banks does not work", but SEPA is possible and SEPA DEBIT on 05/04/2021 with Andorra banks!! After this date must work with PayPal, or? Look: Registers of Participants in SEPA Payment Schemes then SDD Core

 

[orangekangaroo]

I have been waiting for 10 years for PayPal to Andorra banks to be accepted. Sepa is possible but Sepa charges are high unlike in EU.

 

[orangekangaroo]

I have been waiting for 10 years for PayPal to Andorra banks to be accepted. Sepa is possible but Sepa charges are high unlike in EU.

Funny enough the only payment gateway you can run with an Andorran company is Braintree which is owned by Paypal.

 

[nobel]

I have been waiting for 10 years for PayPal to Andorra banks to be accepted. Sepa is possible but Sepa charges are high unlike in EU.

Yes, income money is free (you must speak with the bank), but outside send not (banks very arrogant), hope soon SEPA DEBIT it´s free.

 

[Konstanz]

Yes, income money is free (you must speak with the bank), but outside send not (banks very arrogant), hope soon SEPA DEBIT it´s free.

You can open a personal account in another country for your company or for Andorra company, for example, Bankera, and pay fewer fees. But the fact that Andorra has 10% does not seems a very good deal.
I understand that for French and Spanish is nice because you live near your home and pay 5x less tax..
Also, there are other ways to have Paypal account if Paypal don't accept your country. I had similar issue and @Gediminas helped me.