How do I become a tax resident?
Act now for your future
We can help you with all the formalities involved in expatriating to Andorra: from setting up your company in the country, to making contact with estate agents, reuniting your family or registering your driving licence and vehicles.
What are the advantages of Andorran tax residency?
Tax advantages :
- Income tax rate by band and capped at 10% max
- Corporate tax rate of 10% maximum
- No tax on property wealth
- Low capital gains tax
- No inheritance tax
A growing economic fabric
- Dynamic, diversified economy with opportunities in many sectors.
- A well-developed entrepreneurial fabric, with support for start-ups and SMEs.
- Skilled, multilingual workforce.
An exceptional living environment
:Located to the north of the Iberian Peninsula, the Principality of Andorra enjoys a high mountain Mediterranean climate. The climate is dry, with over 300 days of sunshine a year. Catalan is the official language of the Principality, but 3 other languages are also spoken: French, Spanish and Portuguese. Last but not least, the Principality’s natural landscapes, amateur or high-level sporting activities and sensational events make it an ideal place to live, play and recharge your batteries.
The quality of the health service and social security:
Andorra is in the top 10 of the best health systems in the world in terms of access to and quality of healthcare. It is positioned ahead of France with a score of 89/100.
The body that manages social security is the CASS or Andorra Social Security Fund, while the SAAS or Andorra Health Service is responsible for healthcare.
Under Andorran law, there are several possibilities for tax residency, depending on your plans:
ACTIVE residence
Active residence status: for people who work in Andorra (employees, entrepreneurs, investors). Allows you to live and work in Andorra and benefit from attractive tax arrangements.
PASSIVE residence
Passive residence: for retired people or those who do not work in Andorra. Allows you to live in Andorra for a minimum of 90 days a year and benefit from tax advantages.
INTERNATIONAL PROJECTION
International projection: specific residency status granted to other types of profile, such as artists, top sportsmen and women or youtubers.
More and more entrepreneurs are choosing Andorra. Attracted by an exceptional living environment and attractive tax rates, many choose to establish their tax residence in Andorra. Excellent educational facilities, excellent social security, a safe and rejuvenating environment… Residents enjoy the benefits of Andorran life on a daily basis. Gestoria la Peguera can advise you on the various options available under Andorran law and on the conditions required to obtain tax residency in the Principality.
Are you thinking of becoming an Andorran resident? Don’t hesitate to ask the experts at our Gestoria la Peguera business centre to help you with all the formalities.
What is tax residence?
Tax residence is the status that determines the country in which a person is taxable on their income. It is generally based on the place where a person usually resides, but there are also other criteria, such as the tax home and the centre of economic interests.
Tax residence is important because it determines :
- Which country has the right to tax your income
- The taxes you have to pay
- The tax treaties from which you can benefit
Each country has its own tax residence rules. Before obtaining tax residency in Andorra, we advise you to make an appointment with one of our advisers to ensure that you comply with the tax obligations of the country you wish to leave.
Are there many opportunities for property or financial investment in the Principality?
The Principality of Andorra offers numerous investment opportunities. By becoming a tax resident in Andorra, you can benefit from tax advantages for your property investments. For example, inheritance tax is exempt in Andorra. Tax residents can therefore prepare their estate and protect their heirs.
Don’t hesitate to contact Gestoria la Peguera to help you with your estate planning.
Becoming a tax resident in Andorra
We guarantee tailor-made support in establishing your tax residence in Andorra, whether it’s an active or passive tax residence.
Our experts are at your side for all your administrative procedures in Andorra, such as importing your vehicle, liaising with estate agents and finding educational facilities. We can put you in touch with our legal experts, tax specialists and lawyers in Andorra.
Each project is unique, and we are committed to providing you with the best advice, tailored to your needs, in compliance with the legal provisions in force.
Please do not hesitate to contact us if you require any further information.
FAQ
We will use your feedback to respond to your questions and expectations.
Is it possible to retire in Andorra?
Retiring to Andorra is a simple way to maximise your income. As a resident of Andorra for tax purposes, you are exempt from CSG (Contribution Sociale Généralisée), CRDS (Contribution au Remboursement de la Dette Sociale) and CASA (Contribution Additionnelle de Solidarité pour l’Autonomie). In addition, as a pensioner in Andorra, you can benefit from the services of health institutions and hospitals and private insurance schemes.
How do I become a tax resident in Andorra?
It is often assumed that to be resident in Andorra for tax purposes, you only need to spend more than 183 days a year in the country. Unfortunately, this statement is incomplete and untrue, because depending on your country of origin, there may be a conflict of residence. The criteria for determining tax residence differ from one country to another.
Some countries have different criteria for defining tax residence. It is therefore necessary to respect the regulations between countries. All our consultants can help you with your expatriation project in Andorra to ensure that you comply with all the regulations in force.
Tax residency has major implications for your tax return and your tax obligations, so take the time to find out more from our legal and administrative assistance firm before making any decisions. Changing your tax residence is a real life project. We think it’s important to remember that our firm supports its clients for 24 months, which gives you the time you need to think things through, but also the opportunity to change your plans and make the appropriate changes thanks to our network of partners. For example, it is quite possible to have an economic activity in Andorra and therefore be entitled to tax residency, but to opt for tax residency at a later date, after several years.
What is the tax residence dispute?
Tax residency disputes arise when two countries consider a person to be a tax resident. There are different residence criteria for each country.
Let’s take an example to illustrate the tax residence conflict: Suppose you are of French nationality and you have a house in France where you live part of the year, but you also spend part of the year in Andorra where you have obtained a residence permit. France could consider you a tax resident because of your domicile in France, while Andorra could also consider you a tax resident because of your residence permit in that country. This creates a tax residence conflict, as both countries could seek to tax you on all or part of your worldwide income.
To avoid tax residency conflicts, many countries have signed international tax treaties (also known as double taxation treaties).
These treaties aim to clearly determine in which country a person will be considered a tax resident and to avoid double taxation on the same income. These treaties generally establish specific criteria for determining tax residence, such as the source of vital, economic and family interests.
Andorra has signed several treaties with the United Arab Emirates, Spain, France, Belgium, Liechtenstein and the United Kingdom.
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