Finanzas EU Archives | ANDORRE INVEST

Andorra will soon sign a tax treaty to avoid double taxation with the Netherlands

andorrasolutions — Fri, 15 Oct 2021 10:05:26 +0000

As we mentioned in our January post, by the end of 2020 negotiations with the Netherlands had resumed to agree on a new tax treaty between Andorra and the Netherlands. This week on October 14th 2021, the Government Spokesman Minister, Eric Jover, assured that the agreement to avoid double taxation between the two countries could be concluded very soon. He also reported that the Netherlands is one of the countries with which Andorra has been negotiating for some time.

In addition, he announced that there is interest on the part of Italy to formally begin negotiations on a non-double taxation agreement in the coming months.

On the other hand, the Parliamentary Chamber has ratified the agreement with San Marino.

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Andorra is not a tax haven

Evangelos Hatgiconstantis — Wed, 07 Apr 2021 08:49:19 +0000

The Council of the European Union has published on 22 February 2021 the revised list of non-cooperative jurisdictions for tax purposes, also known as tax havens. The changes to this list are based on the ratings published by the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes. For the purposes of this list, the EU requires jurisdictions to comply extensively with the international standard for transparency and exchange of information on request (EOIR).

The criteria for including jurisdictions on this list are failure to meet agreed commitments related to reforms to bring them in line with good tax governance objectives, or that have not yet entered into a dialogue with the EU in this regard.

This report is published after the controversy in Spain about the ” escape ” of Spanish YouTubers to Andorra for the alleged sole purpose of saving taxes and the proposal by Spanish politicians for Andorra to be included in the list of tax havens. As expected, Andorra is not on this list published by the Council of the EU as it meets all the criteria of good governance and fiscal transparency.

Andorra, through its head of government, Xavier Espot, has stressed that the proposal from Spain starts “from a false premise that is based on prejudices” and made it clear that Andorra “is no longer a tax haven”. Furthermore, the criteria for granting tax residency in Andorra are clear, strict and must be fully complied with. There are no shortcuts for having large fortunes.

It is important to emphasize that Andorra offers much more than tax advantages: an enviable natural environment, high quality of life, privileged geographical location between Spain and France accessible by road, excellent health care, multilingual education system, high-speed Internet, signed tax information exchange and double taxation agreements… and for all these reasons we invite you to visit us and get to know Andorra better.

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Have a company in Andorra while living in Spain

andorrasolutions — Thu, 03 Dec 2020 10:37:16 +0000

Thanks to new technologies, knowing what is going on in your company no longer depends on being there in person, but on having access to the information. Nowadays it is common to check bank accounts, sales reports, orders, accounts receivable, etc. from anywhere, simply by having a computer and Internet access. For this reason, it is viable to have your company in Spain and live in Andorra, taking into account the fiscal responsibilities that both the company and the administrator have.

Let’s explore the following options:

Living in Spain and having your company in Andorra
The formation of companies with foreign capital is allowed in Andorra, so a resident in Spain can create a company in Andorra, as long as certain requirements are met. It is important to clarify that the company will have tax obligations in Andorra since it is the location of its tax domicile and the investor will maintain its tax residence in Spain, following the tax regulations of his country.
Living in Andorra and having your Company in Spain
By law, every company incorporated in Spain must have its registered office and tax domicile in Spain. The company pays taxes in Spain since its fiscal domicile is there, but, if you are a fiscal resident in Andorra, your personal taxes would be paid in Andorra. It is not that complicated. In Spain, it is possible to create a company by designating a person living abroad as a director.

From our perspective, Andorra offers many more fiscal advantages compared to other countries. The personal income tax in Andorra is one of the lowest in Europe and for this reason it attracts many people. In addition, the corporate tax in Andorra is usually 10% and sometimes less depending on the type of activity in which it is involved. So why not make the most of it by moving both your personal residence and your company to Andorra?.

Another alternative is to create a holding company in Andorra. The Andorran resident has shares in foreign companies, for example in Spain, whose dividends generated are not taxed on income tax and profits generated outside Andorra are exempt from tax. These are part of the advantages that a holding company in Andorra can offer you.

Moreover, there is a double taxation agreement between Spain and Andorra that clarifies this type of international transfer of business activity between the two countries with different residences. In any case, the applicable international taxation should be studied with possible deductions depending on the agreement and the country of origin of these transfers.

Economic substance

It is important to know that a company without substance in a low tax country can be considered as an offshore or shell company. This interpretation can lead the taxation of the company to the tax residence of the manager. This is why we recommend an operation with substance in the country. Find here more information on the requirements of substance in Andorra.

We understand that the information provided is general and may not be fully adapted to your current situation. We therefore suggest you contact our specialists in taxation and company formation in Andorra to analyze your case in depth and offer you the most appropriate solution.

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Andorra becomes the 190th member of the International Monetary Fund

andorrasolutions — Thu, 05 Nov 2020 11:56:16 +0000

The Principality of Andorra becomes the 190th member of the International Monetary Fund (IMF). A process that began in January 2020, with the formal request of the Minister of Finance and Spokesperson for the Government of Andorra, Eric Jover, before this body. On the night of Friday, October 16, 2020, the instrument of ratification was deposited in Washington, at the IMF headquarters, by the Ambassador of Andorra to the United States, Elisenda Vives. The Ambassador then signed the statutes on behalf of the Government of Andorra.

IMF Managing Director Kristalina Georgieva reported that she is pleased to welcome Andorra as a new member and that the organization will work closely with the Andorran government to achieve its growth objectives, in cooperation with other partners in the international community.

Interesting fact: only 4 member countries of the UN are not members of the IMF: Cuba, Liechtenstein, Monaco and North Korea.

Andorra becomes the 190th member country of the International Monetary Fund

Although Andorra has had relations with the International Monetary Fund (IMF) for years, with this incorporation, Eric Jover ensures that Andorra will improve its reputation and international approval. It also affirms that Andorra will “have access to more and better technical assistance and training in financial matters, and opens the door to having a financial safety net in case of need”.

The IMF executive consists of 24 directors. These represent the constituencies and member countries. Andorra enters the group formed by Belgium and the Netherlands. The Finance Minister explained that he chose this group due to the financial similarities they have with the other countries that make up it. Andorra, being a full member, participated on Friday in its first vote for the election of the new executive director of its group, Paul Hilbers.

In a nutshell, the entry of Andorra to the IMF has a positive impact on the reputation and prestige of the country, improving its rating worldwide. The country will be able to receive an annual review or “health check” of its economy by the IMF; it will be able to access training and technical assistance in addition to possible loans in case of emergency.

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Andorra advances with new agreements against double taxation

Evangelos Hatgiconstantis — Wed, 16 Sep 2020 15:41:34 +0000

Andorra continues to work on foreign policy issues with new tax conventions to avoid double taxation. Andorran foreign affairs minister Maria Ubach has reported that the next agreements to be signed will be with the Netherlands, Belgium and Hungary. Currently the Principality of Andorra has signed agreements to avoid double taxation with the following countries: France, Spain, Portugal, Luxembourg, Liechtenstein, Malta, United Arab Emirates and Cyprus.

Negotiations are well advanced and the agreements would have already been signed if COVID-19 had not appeared, although this year they should conclude, the Minister reported on September 10 when she presented Andorra’s annual report on foreign action for 2019.

The signing of these new agreements was to be expected soon since exchanges with Belgium and the Netherlands began almost 3 years ago and with Hungary the last contact was in February of this year. These new agreements will open an important commercial exchange between Andorra and these countries, promoting the transit of goods and services.

On the other hand, the minister reported that the agreement with Germany is costing more since they consider that the economic activity between both countries does not justify said agreement, although the minister insists that an agreement with Germany would be positive for Andorran foreign policy. She also indicated that soon, possibly in January 2021, negotiations with Italy could begin and that she sees it feasible to start talks with Austria.

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