Andorra, nestled in the heart of Europe, is emerging as a tax haven, attracting elite athletes, YouTubers, and influencers. Here's an in-depth look at why:

1. Tax Benefits in Andorra:

   • A flat tax regime for individuals and companies with a rate of 10%.
   • A VAT rate of 4.5%.

2. Who's Moving to Andorra?

   • Andorra is increasingly becoming home to top-tier athletes, YouTubers, and influencers with millions of followers. They are drawn by the favorable tax environment, including agreements to avoid double taxation (DTA), a reduced personal income tax of 10%, and the lowest IGI (equivalent to VAT) in Europe.

3. Taxation for YouTubers and Streamers:

   • In countries like Italy, Spain, and France, income from YouTubers, streamers, and influencers is generally classified as business income and can be taxed up to 50%. In contrast, Andorra offers:
     • 0% tax for income up to 24,000 euros.
     • 5% tax for income between 24,000 and 40,000 euros.
     • 10% tax for income above 40,000 euros.

4. Corporate Taxation in Andorra:

   • The corporate tax rate is a maximum of 10%. However:
     • The first 50,000 euros of profit are taxed at 5% if the company's turnover is less than 100,000 euros in the first three years.
     • Profits above 50,000 euros are taxed at 10%, regardless of turnover.

5. Other Taxes in Andorra:

   • Capital gains tax: A fixed rate of 10% on financial gains.
   • Property transfer tax: Ranges from 1% to 15% based on the increase in property value during transfers.
   • Business registration tax: Varies from 20 to 800 euros annually, depending on the company's legal form.

6. General Indirect Tax (IGI):

   • The standard IGI rate is 4.5%, with reduced rates for specific services and goods.

7. Legal Processes and Procedures:

   • Most YouTubers, streamers, and influencers in Andorra invoice their earnings through a sole proprietorship, subjecting them to the aforementioned tax rates. Dividends paid by companies to YouTubers are entirely exempt from personal income tax in Andorra.

8. Lifestyle in Andorra:

   • Andorra offers a blend of Spanish, French, and Catalan cultures, with all three languages spoken widely. The principality boasts one of the world's lowest crime rates and offers a Mediterranean culinary experience.

9. Conclusion:

   • While Andorra is recognized for its low taxes, especially when compared to countries like Italy, France, or Spain, there are even more tax-friendly jurisdictions. However, the combined benefits, especially the fiscal ones, make Andorra a preferred choice for eGamers, influencers, YouTubers, and content creators.

For a personalized consultation on your tax situation and the benefits of relocating to Andorra, it's recommended to seek expert advice to ensure you make informed decisions and avoid potential pitfalls in the future.

Tax residence in Andorra.

We will see when you are considered a tax resident in Andorra, based on the legislation of the nation.

First of all, you are considered to be fiscally resident in Andorra if you stay in the territory of Andorra for more than 183 days, during the calendar year.

You are also considered to be a tax resident in Andorra if your main nucleus, or the base of your activities or economic interests, is in the territory of Andorra.

Unless proven otherwise, it is assumed that a person has tax residence in the territory of Andorra when the spouse and children are tax resident in Andorra.

Work permits are notoriously not easy to obtain.

Most of the people who aspire to reside in Andorra, statistically, prefer to obtain the so-called passive residence permit, reserved for certain categories of subjects.

Passive residence is not ideal for everyone, since it does not allow you to get a job in Andorra, or to run a business in Andorra (for example with Andorran employees and business premises located there).

However, with passive residency you can manage internet businesses, outside the principality, or consultancy activities with clients in other countries, making it ideal for many of those aspiring to move to Andorra.

To access the passive residence permit, it is necessary to reside in the principality for more than 90 days a year.

Also, your income should be at least 3 times the average minimum wage.

And there are also new requirements, which we will discuss in a separate installment of this series.

Disclaimer: Always speak directly to an attorney; blog posts are not a sufficient source of information to make decisions, may not be appropriate for your situation, may not be well researched, and may not be current at the time you read them, always speak directly with an attorney.

Contact us today to learn more about how we can assist you in achieving your goals and securing a prosperous future.

Read also:

How is life in Andorra?

ANDORRA: Is this the right place to stop paying taxes?

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