Andorra is a small country that is on everyone’s lips for all the advantages it brings to those who take the step to live within its 460 km².
There are many charms of the Principality, famous for its natural partners and every day more attractive for its tax system.
Today, in this last post we will tell you much more about Andorra, its taxation and why the country is fashionable.
Why more and more people are choosing to move to Andorra
A privileged environment
Its privileged location in the Pyrenees leaves us with ski resorts and mountainous areas that are the main attraction for many tourists.
We are talking about natural sites ideal for mountain-related sports where elite athletes find the perfect place for their training.
Undoubtedly, nature is one of the best leisure options for those who decide to move to the Principality.
Sanitary system
The Andorran country is at the top of the world ranking of healthcare systems and this works with its co-payment system:
- Seventy-five percent of the medical consultations made by citizens are covered by the government.
- In the case of surgical interventions or admissions, this percentage is up to 90%.
Weather
During the winter season, the country welcomes us with huge snowfalls that favor the arrival of tourists to the ski resorts.
The winter is cold, but in summer we find temperatures of 24 °C on average that give us respite and keep us away from the sweltering heat of neighboring countries.
Undoubtedly, this climate invites you to visit the country at any time of the year.
Educational system
On the other hand, those families who take the step of moving to Andorra find a great educational system.
We are talking about classrooms in which French, Catalan and Spanish coexist, giving students the opportunity to learn each language.
In addition, the educational system is completely free of charge.
Quality of life
Andorra is one of the countries with the best quality of life. It has excellent air quality 90% of the time, thanks to its natural surroundings.
This, together with other factors, gives its citizens a high life expectancy and places it at the top of this ranking worldwide.
If you are thinking of moving to Andorra, consult our recolation service.
Citizen security
This is something that we have already commented on occasion, and is that the Principality is one of the safest countries to live in. It has one of the lowest crime rates. In fact, this places the country in the top 5 safest countries for tourists and its citizens.
Advantages of the Andorran tax system
The Principality’s economic model has made the establishment of small businesses in the country a daily occurrence in a nation that offers many tax advantages.
This type of advantages makes it different from the rest, but in order to benefit from them, a series of requirements must be met.
The first point to bear in mind is that these advantages cannot be enjoyed until the tax domicile is changed to the Andorran territory. change the tax domicile to the Andorran territory.. This is achieved by working and living in Andorra for more than 183 days, in case you want to obtain an active residence permit.
We can also opt for passive residence, which is for those who want to live there and do not have as main objective to work in the Principality. Only 90 days of mandatory stay in the country per year are required to obtain it.
On the other hand, if we speak from the point of view of a company that establishes itself there, in order to enjoy the Andorran tax system, its corporate name must be in the country.
These are the most basic requirements, both for workers and entrepreneurs, which translate into tax advantages over taxes such as:
- Corporate Income Tax
- Personal Income Tax (IRPF)
- VAT, known as IGI in the Principality.
This tax system is attractive due to its low taxation, as we have one of the lowest corporate income tax rates in Europe, which only reaches a maximum of 10%.
The IGI, for its part, represents a great difference with the rest of the countries in the region, since, for example, it is only 4.5% for the exchange of goods in the territory, while in countries such as Spain it is as high as 21%.
Regarding personal income tax, we highlight that during the first 24,000 € per year, there is an exemption of this tax of up to 100%. This leaves a higher profit margin. During the following 16,000 € this tax becomes 5% and when it exceeds 40,000 € per year it will reach a tax rate of 10%. A tax that is still far from reaching the amounts of neighboring countries, as in France, where this tax can reach up to a tax rate of 25%.
Finally, it is also noteworthy that the average Social Security contribution is 15.5%.
As we can see, these are some of the main attractions of the small country compared to other nations. A tax system that is difficult to overcome, which above all leaves us with great flexibility for the creation of new projects.
If you are thinking of obtaining your tax residence in Andorra, in this article we tell you how to do it.
These are just some of the peculiarities of the Andorran territory that make moving to Andorra worthwhile.
And remember, if you want to be part of a privileged environment in many ways, Wit will help and advise you to make the bureaucratic procedures much easier.
Let yourself be guided by professionals.
