Andorra has become a very beneficial destination for businessmen, investors and individuals from all over the world. Its natural environment, high quality of life and, above all, a favorable tax system and taxes in Andorra, make this country a favorable place for investment and to establish residence. In this blog we explore the advantages of living in Andorra and how the Vora Riu residential complex being built in El Tarter is an excellent option for those looking for a highly profitable home.
The tax system in Andorra
→Taxation
Andorra has a diversified tax system, with direct and indirect taxes. Recently digitalized, the tax declaration process has been simplified. Among the different taxes, we highlight the 10% corporate tax and the progressive personal income tax (IRPF). The IGI, equivalent to the Spanish VAT, is 4.5%, a rate well below that of neighboring countries. There are also progressive taxes on foreign real estate investment, ranging from 3% to 10% of the real value of the property, depending on the number of properties and the type of investment.
On the other hand, Andorra has established agreements with different countries, including Spain, to avoid double taxation. Another peculiarity of the Pyrenean country is that it has no wealth tax or transfer tax. These characteristics of the Andorran tax regime make the country a pole of attraction for investment.
→Corporate tax
Corporate tax in Andorra is one of the lowest in Europe, with a maximum rate of 10% on profits earned. This difference stimulates the creation of companies and the arrival of investors. Such tax applies to all entities, regardless of the sector to which they belong and their characteristics.
→Individual income tax.
Personal income tax (IRPF) in Andorra is levied on income obtained by tax residents of the country. It applies to income from economic activities, investments, leases or pensions, among others. The progressive rate of personal income tax is as follows:
- Up to 24,000 euros: 0%.
- Between 24,000 and 40,000 euros: 5%.
- From 40,000 euros: 10%.
→General Indirect Tax (IGI)
IGI is the equivalent of VAT and in Andorra it stands at 4.5%, one of the lowest in Europe. The frequency of IGI declaration varies according to the annual turnover of the companies:
- Less than €250,000, every six months
- Between €250,000 and €3,600,000, quarterly
- More than €3,600,000, every month
In addition to the general IGI of 4.5%, reduced rates apply for a variety of products and services, such as medical care (0%), education (0%), food (1%), transportation (2.5%), culture (2.5%), social services, banking, financial services and for the purchase of real estate intended for rental purposes.
→Tax on foreign investment in real estate.
A new law passed at the beginning of 2024 collects the tax on foreign investment in real estate in Andorra. It is a tax of an indirect and progressive nature, it is applied on the real value of real estate acquisitions and is governed following the following characteristics:
- 3% for the purchase of the first property.
- 5% for the purchase of the second property.
- 8% for the purchase of at least 6 properties.
- 10% from the tenth real estate unit onwards or for urban or real estate developments.
If the property is intended to be rented for a minimum of 10 years, there is a 90% rebate on the tax liability.
→Conventions to avoid double taxation.
Andorra has to date signed agreements with several countries to avoid double taxation, which further facilitates the tax situation of residents and investors in the country.
These countries are: United Arab Emirates, Spain, France, Liechtenstein, Luxembourg, Malta, Portugal, Cyprus, San Marino, Hungary, Czech Republic, Croatia, Monaco, Iceland and the Netherlands.
For its part, Andorra has no wealth tax or transfer tax, which adds an additional attraction for those seeking to preserve their finances.
Homes in Andorra: Vora Riu, a natural and exclusive setting
Aimed at both private individuals and businessmen and investors interested in acquiring real estate in Andorra, Vora Riu is a residential complex with an unbeatable location as it is at the foot of the Grandvalira ski resort slopes. The building, consisting of 76 apartments, is located just a few minutes from the El Tarter cable car, one of the most dynamic sectors of the seven that make up the main Andorran ski area. The Vora Riu apartments have been distributed in eight portals with the aim of protecting the privacy of the residents.
→Alpine design, elegance and luxury.
The building, with one- to three-bedroom apartments, stands out for its elegant alpine-style design and high-end finishes. Luxury and comfort are paramount, as the property includes parking spaces, storage rooms, ski rooms and underfloor heating. The facade, meanwhile, is made of natural stone and wood, which harmonizes with the surrounding mountain environment, while the interiors are bright and spacious to promote coexistence and rest.
→An environment with all the essential services
The proximity to the ski and snowboard slopes as well as the comfort and elegance of the homes are not the only singularities of Vora Riu. The building offers residents all essential services within walking distance as well as a wide range of leisure and entertainment. And just a few kilometers away is Canillo, the head town of the parish of the same name, to which El Tarter belongs. On the other hand, Andorra la Vella is 16 kilometers away and a bus line with high frequency communicates daily both nuclei.
You can see here the available units of apartments in Vora Riu.
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