THE AUTOMATIC EXCHANGE OF INFORMATION IN TAX MATTERS HAS BECOME ESTABLISHED AND EXPANDS
On 30 November 2017, the Andorran Parliament (Consell General) approved the amendment of the Automatic Information Exchange Law (IAI) in tax matters. This regulates the exchange of information about financial accounts between the Principality of Andorra and other states, under applicable agreements or conventions. The mechanisms and protocols are based on the OECD’s common standard for reporting and due diligence.
The introduced amendment expands the list of states with which tax information relating to financial accounts from 2018 will be automatically exchanged in 2019.
The list of 32 jurisdictions with which Andorra will automatically exchange information will expand the 2018 list, which basically consists of EU countries, by incorporating member states of the G20, OECD, Global Forum and various international financial markets.
It is important to highlight that the information to be reported by the financial institutions must always refer to complete calendar years and start on 1 January of the year in which the reporting obligations come into force.
Before the Law was amended, the Automatic Information Exchange for 2018 was already in force with the following 41 jurisdictions:
Member states of the European Union: Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.
Jurisdictions with an agreement with the European Union for the automatic exchange of information: Liechtenstein, Monaco and San Marino.
Also, Argentina, Australia, Faroe Islands, Greenland, Iceland, Norway, South Africa, South Korea and United Arab Emirates.
The purpose of amending the Law is to automatically exchange information for 2019 with the 32 additional states and jurisdictions below:
G20 states: India, Mexico, Canada, Brazil, China, Indonesia, Japan, Russia and Saudi Arabia; OECD member states: Chile, Israel and Switzerland; and member states of the Global Forum on Tax Transparency: Colombia, Costa Rica, Kuwait, Malaysia, Uruguay.
States and territories with significant sectoral or regional financial markets: Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey, Montserrat, Seychelles, Turks and Caicos Islands, Antigua and Barbuda, Cook Islands, Curaçao, Grenada, Mauritius and Saint Vincent and the Grenadines.
It should be noted that natural or legal persons who hold financial accounts in Andorra and are tax residents of a state for which the IAI is applicable, are subject to reporting.
Residents who are taxpayers in Andorra will not be subject to reporting in relation to their financial accounts in Andorran financial institutions, but may be subject to reporting in relation to financial accounts in financial institutions outside Andorra, with which the IAI has been activated.
Finally, it must be emphasised that the Automatic Information Exchange is only for financial accounts; no information about real property is exchanged.