Recently there has been a lot of talk about El Rubius’ emigration from Spain for fiscal reasons. But… is he only moving so that he can pay less tax? Apart from the lighter fiscal burden, what other attractions can YouTubers find in Andorra? We talked about this with Josep Garcia, a co-founder and director of Advantia Assessors.
Why are YouTubers coming to live in Andorra?
One of their main reasons for coming is doubtless the lighter fiscal burden, which allows them to keep a larger proportion of their income than in their countries of origin. But in addition to the advantageous Andorran taxation system, another attraction for them is the quality of life. The Andorran public health service is one of the most highly rated in the world. And let’s not forget the scenery: only 10% of this country’s territory is urban – all the rest is the natural environment. In Andorra, YouTubers can continue with their usual work, because optic fibre and the internet reach every part of the country. Another advantage is the proximity to Spain, Barcelona being only 200 km. away.
What does a YouTuber need to do in order to come to live in the Principality?
They must first apply for a residence permit. There are two types of residence: active and passive, the latter being also called the fiscal residence. YouTubers in Andorra fall into the second category as they as regarded as performing on the international scene. They have to fix their main residence in the Principality and live in it for at least 90 calendar days per year. They must also carry out their work from a base in the Principality. If they wish to apply for active residence, they have to spend 183 days in the Principality.
Are YouTubers obliged to buy homes in Andorra?
No – that is not necessary. They can rent homes if they wish. When applying for residence, and in order to prove that they are going to live in Andorra, they can present a contract for the rental or purchase of a house or flat.
Is the tax saving that they obtain through coming to Andorra really substantial? Is Andorra really a haven for YouTubers, entrepreneurs, and elite sportspeople?
The country’s tax burden is much lighter than that of the neighbouring countries. For example, income tax is levied at 10% on incomes of €40,000 or more, and is only paid on incomes of €24,000 or more. Between €24,000 and €40,000, the rate is only 5%. VAT (“IGI” in Andorra) is at 4.5%. The saving is significant.
Five key points in the application for fiscal residence in Andorra.
1) Financial aspects:
- The law states that you must have sufficient means to live in the country for the period of your residence permit, quantified at 300% of the minimum annual salary.
- A non-interest-bearing deposit of €50,000 must be left with the AFA (Autoritat Financera Andorrana: Andorran Financial Authority).
- YouTubers in Andorra have to take out health insurance policies covering medical expenses in the country of residence.
- As mentioned above, you will have to present a contract for the rental or purchase of a home, and to reside for a minimum of 90 calendar days per year.
- Concerning the business activity:
– Andorra must be the headquarters of the activity.
– 85% of the services have to be provided outside Andorra.
- The applicant’s criminal record certificate from their country of origin must also be presented.
To request active residence for self-employment, it is necessary:
- To Carry on an activity for one’s own account.
- You have own at least 20% of a business established in Andorra, and to be part of the management body.
- In this case, applicants will have to prove that they live in Andorra for at least 183 calendar days per year.
- To deposit €15,000 with the That sum will be returned in full when the person ceases to reside in the country, provided that the person has no debts.
- As in the first case, the applicant will also have to present a criminal record certificate from their country of origin.
If you would like more information about living in Andorra, please continue to follow our blog and visit our website.