30th September: the last day for filing the personal income tax return in Andorra.
The last date for filing the Income Tax Return is 30th September. We explain, below, everything you need to know about this tax in Andorra.
Income tax in Andorra
Andorra, with a maximum rate of 10%, has one of the lowest income tax rates in Europe. Moreover, for taxpayers whose net income is between 24,001 and 40,000 euros, the tax rate is only 5%. This relatively new tax has existed in Andorra since 2015. The collection period is from 1st April to 30th September.
Who is liable for income tax?
All individuals with fiscal residence in Andorra who have the following characteristics:
- Individuals with income from economic activities.
- Individuals with an annual income (from property or work) of 24,000 euros or more.
- Income from movable assets in excess of 3,000 euros and which has not been withheld.
- Income from capital gains.
Individuals with income under 24,000 euros per year are not liable for income tax.
The following cases are regarded as fiscally resident in Andorra:
- Individuals residing in Andorra for more than 183 days during the calendar year.
- Individuals whose centre of activities or economic interests is situated in Andorra, whether directly or indirectly.
It should be remembered that cross-border workers from Spain and France who work in a company with Andorran tax residence are not considered to be tax residents. These workers, and also seasonal workers, are subject to non-resident income tax.
What types of income are subject to income tax ?
- Income such as wages, salaries or other considerations deriving from an employment relationship.
- Income from property: rent and other income deriving from property or property rights.
- Income from economic activities such as business, professional or managerial activities.
- Income from movable assets such as dividends or other income deriving from holdings in the equity of entities, from the transfer to third parties of equity capital or from capitalisation operations, life assurance or disability insurance.
- Capital gains arising from changes in the composition of assets.
Andorra at the head of the safest countries with regard to the pandemic
We remain vigilant. In fact, active measures are still in place in Andorra to fight a coronavirus rebound outbreak. Currently, some 2,100 tests are being carried out every week (3% of the population) to detect the disease quickly and to be able to isolate infected people. This test is free of charge and can be requested by any citizen who suspects that they may have the virus or have been in contact with a positive case.
The Ministry of Health has assigned a large team of professional workers to track the contacts of people with COVID-19. When a new case is detected, the direct contacts of a person who has tested positive are quickly contacted and “confined” at home until a MAT or PCR test is performed. If they test positive, they are confined for a period of 15 days, and the process is repeated with their direct contacts. If the test is negative, they have to repeat it the following week to have a double negative, which ensures that the positive contact has not developed the virus.
Now, a few weeks before the schools re-open, the government has announced voluntary mass testing for all teachers and pupils.
Schools will continue to organise themselves into co-habitation groups, and pupils with a double negative PCR test will be exempt from wearing masks when in their group. These tests are expected to take place every month.
It is worth remembering that, after the initial chaos of the pandemic, Andorra was one of the pioneering countries in carrying out a massive study to find out the real extent of COVID-19 in the entire population. 138,000 tests were carried out on a voluntary basis, two per person, which represents 90% of the population.
Don’t hesitate to contact us if you have any questions or doubts. Advantia Assessors will be pleased to advise you at all stages of your tax return in Andorra.