Corporate Income in Andorra

Corporate Income Tax in Andorra

Corporate income tax in Andorra is one of the lowest in the world. The percentage to be paid ranges between 2% and 10%, depending both on the activity of the company and the amount of income generated by it. Below, we explain when and how much corporation tax you will have to pay in Andorra depending on your business activity and the amount of profits it may generate.

How much corporation tax do I have to pay in Andorra?

Corporate Income Tax in Andorra is paid according to the net profits obtained by a company. In Europe, the amount payable by a company in respect of its net profits is usually around 25%. Therefore, even paying the maximum rate of 10%, having a company in Andorra can mean an average profit of 15% compared to neighbouring countries. In Andorra, the general corporate tax rate is set at a maximum of 10% of the company’s annual profits. However, there are so-called special regimes, which apply to those companies that meet a series of requirements and conditions and which have an effective rate of 2%. Thus, there is a special regime for companies that exploit intangible assets (such as patents or utility models), for cooperative companies and for companies whose activity is the management and holding of shares in companies resident or non-resident for tax purposes in Andorra. There are also corporate income tax exemptions (i.e. the applicable tax rate is 0%) for collective investment institutions (such as SICAVs), excluding wealth management companies, and for dividends received by Andorran companies from Andorran tax residents.

How is corporation tax paid in Andorra?

In Andorra, unlike other countries where this tax is paid quarterly, corporation tax is paid annually, with the tax period coinciding with the company’s financial year. However, you should bear in mind that the tax is paid as follows:
  • In the month of September, 50% of the Corporate Tax for the current year must be paid, taking into account the profits reported in the immediately preceding year.
  • At the end of the current tax period (usually during the month of July) the second part of the tax must be paid, after deducting the part already paid at the beginning of the year.
When, by virtue of the profits obtained during the current tax period, the amount paid in September makes the amount payable in July negative, the Andorran Ministry of Finance will refund the excess to the taxpayer.

Advice for companies in Andorra

Andorra is a very attractive country in which to incorporate a company. The reduced corporate tax is just one example of its many tax advantages. Even though there are undoubted advantages, the process of setting up and maintaining a company in Andorra is equally or more complex than in other countries, something that Delvy can help to solve. Our professionals have been advising companies for years, both in Andorra and in Spain and Mexico, and have extensive experience in all the procedures involved in setting up and maintaining a company. In addition, we are also specialists in obtaining financing for your business. That is why, if you need help to create or maintain a company in Andorra, Delvy will be delighted to help you. Contact our team!
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CONTACTA CON NOSOTROS

INFORMACIÓN SOBRE PROTECCIÓN DE DATOS DE DELVY ASESORES, S.L. Finalidades: Facilitarle un medio para que pueda ponerse en contacto con nosotros y contestar a sus solicitudes de información, así como enviarle nuestro boletín comercial y comunicaciones informativas que puedan ser de su interés, incluso por medios electrónicos, en caso de aceptar la casilla correspondiente. Legitimación: Su consentimiento expreso, la ejecución de la relación precontractual o contractual mantenida con usted y el interés legítimo de Delvy. Destinatarios: La información proporcionada podrá ser compartida con nuestra base de datos de almacenamiento y terceros proveedores que nos ayudan en la prestación de los servicios. Derechos: Puede retirar su consentimiento en cualquier momento, así como solicitar el acceso, rectificación, limitación, supresión, y/o portabilidad de sus datos en la dirección de correo electrónico [email protected] Información Adicional: Puede ampliar la información en el enlace de Política de Privacidad.