Reporting income and salaries in kind in Andorra

How should contributions or salary income in kind in Andorra?

The income or remuneration in kind are considered all those salaries that a worker is not perceived in the form of money , but of products, goods or services. Many companies implement this pay policy with employees as a means of motivation and incentives that can influence the welfare of the worker and, therefore, performance.

They are called flexible formulas that companies use as salary supplements in kind such as accommodation, meals, transfer vehicle, using a housing, food vouchers, medical insurance, pension plan contributions and checks nursery.

These rents or wages in kind should be previously agreed between the employer and the employee , either in the collective agreement or in the same group employment contract . This implies that the company is obliged, according to the agreement or contract to provide good, right or service. But what about when such income be taxed? They forced businesses and workers contribute to them? There are some exclusions?

The Andorran Social Security (CASS) maintains that all the rents in kind shall be subject to social security contributionsexcept for the participation of the company in financing a supplementary retirement plan public or private and the perception of the benefits or performance of this plan.

Pursuant to Article 18 of the Rules of Procedure contribution and collection of social security CASSthe contribution base of the salaried persons should be constituted by the total wages , either in cash or in kind.

"The overall salary compensation, the company issued to the employee as consideration for their services, including supplements, bonuses and other bonuses and payments in kind, according to the definition of 'pay' that established labor laws, "says the agency Andorra.

What are the salaries in kind should be taxed?

In the case of CASS, are considered income in kind , inter alia, monetary advantageous loans granted to employees, financing private insurance, monetary or non-monetary incentives, alimony and accommodation provided by the company the use of housing provided by the company and allowances and travel expenses under the terms provided by the regulations of Social Security. Here are explained some of these considerations:

  • Cash loans to employees : when granting loans with interest rates below the legal money is considered income in kind the difference between the interest paid and the legal interest in force.
  • Insurance contracts in favor of workers : is considered income in kind the amount of premiums or payments made under the insurance contract, including taxes levied on insurance.
  • Full board and accommodation provided by the company : both aspects, if provided by the company, constitute payment in kind, except they are not satisfied with the form of money.

Remuneration in kind tax exempt

As mentioned above, CASS price remains excluded from the participation of the company in financing a supplementary retirement plan public or private and perception of the benefits or performance of this plan.

Furthermore, since the Andorran agency added that are not considered salary of tips or gratuities from clients of the company employees ; just as neither are considered salary allowances and travel expenses precise, so that these do not weigh on the obligation quote.

If you need to receive personalized advice or have any questions about the system of contributions Andorran please contact your tax advisor IS21 with no obligation . Let's talk?