The Principality of Andorra is without doubt an attractive location to live . A high level of services, coupled with an idyllic natural environment, a good quality of life and low taxation , make the Pyrenean country a great attraction for many people.
Retirees are specifically one of these groups of individuals. And thanks to a favorable tax jurisdiction , pensioners can maximize the return on equity that have been saving throughout their working lives.
Advantages tax system Andorran
tax system of Andorra is characterized, first, by a single income tax of 10%, with significant exemptions for capital gains , a tax burden attractive when compared to neighboring countries such as Spain or France, where the maximum rates exceeding 50%. In Spain, there are some regions where the income tax for top earners reaches 56%.
Another advantage is the absence of both taxes on capital and on successions and donations . We should also mention that this is a country which apply a lower rate to indirect taxation , such as in the case of VAT stands at 4.5%. When compared with neighboring countries again, we see that the difference is more than notable. For example, in Spain the general rate of VAT is 21% while in France it is 20%.
Thus, it is evident that in case of retirement disposable income is much higher for residents of Andorra in other countries of the European Union.
Residence permit in Andorra
For those who wish to retire in Andorra and non-residents in the country, it is necessary to apply to the Department of Immigration for a residence permit.
Andorra includes four residence permits without the right to work -residència fiscal- or passive. Retirees must apply for a permit residents without gainful activity . For it must meet certain requirements such as establishing his principal residence in the country and effective for at least 90 days per calendar year , or submit official documentation necessary required by the Immigration Department of Andorra. In addition, it is necessary that the applicant stating the following:
As is the same department, this residence permit is valid for two years , renewable for a period of two years , the first cop- and for a period of three years for the second renewal . After this, the renovations are set for a period of 10 years.
So, once transferred residence, the taxpayer becomes resident for tax purposes and Andorra can enjoy the tax advantages mentioned above as well as the benefits of the CDI's signed by Andorra . Specifically, in September 2015 ratified the CDI between Spain and Andorra . which entered into force in early 2016. The CDI has also been ratified with France
If you need to receive personalized advice or want to establish your residency in Andorra and want to apply for a residence permit without work contact the team of tax advisors IS21 with no obligation .