Personal income tax

In 2015, the IRPF law 5/2014 of April 20 enters into force with a base and really reduced rates that make the Principat, one of the best jurisdictions to settle.

Criteria to determine tax residence

Criteria very similar to those established in the Spanish personal income tax law:

  • Permanence criteria: more than 183 days in Andorra
  • Criteria of vital interests: family nucleus located in Andorra
  • Economic interest center located in Andorra

Double taxation agreement between Andorra and Spain

The CDI establishes in its article 4 that when a natural person is a resident of both States, their situation will be resolved as follows:>/p>

  1. You will be considered a resident exclusively of the State where you have permanent housing at your disposal; If you have permanent housing at your disposal in both States, you will be considered a resident exclusively of the State with which you have closer personal and economic relationships (center of vital interests)
  2. If the State in which said person has the center of his vital interests could not be determined, or if he did not have permanent housing at his disposal in any of the States, he shall be considered as a resident exclusively of the State where he usually lives
  3. If he habitually lived in the two States, or did not do so in either of them, he shall be considered as a resident exclusively of the State of which he is a national.
  4. If it is a national of both States, or not of any of them, the competent authorities of the Contracting States shall resolve by mutual agreement.

Key Income in the IRPF

Income is included in the tax through two large groups:

  1. GENERAL BASE: Work income, activity income and real estate income
  2. BASE OF SAVINGS: Movable capital income and capital gains and losses
  3. The personal and family minimum is 24,000 euros. In case the spouse does not work, the minimum is 40,000 euros.

GENERAL BASE. Tranches and tax rates
Up to 24.000 euros 0%
From 24.000 euros to 40.000 euros 5%
More than 40.000 euros 10%
BASIS OF SAVINGS. Tranches and tax rates
Up to 3,000 euros 0%
More than 3,000 euros 10%
Basis of savings. Subject, non-subject and exempt income
Capital gains per c / v in IIC

Capital gains per share / share

NO

Exempt if the participation is less than 25%, or if it exceeds, if they have been kept for 10 years
IIC Yield Distribution NO They are exempt
Andorran Public Debt Returns NO Exempt