👉 Impuestos España vs Andorra ¿Cuántos menos Impuestos se pagan?

Summary

This video explains the key tax differences between Andorra and Spain, highlighting Andorra’s lower tax rates. It covers personal income tax, corporate tax, and indirect taxes like VAT. Andorra offers significant advantages such as a 10% maximum personal income tax rate, lower corporate tax at 10%, and exemptions on certain capital gains. In contrast, Spain’s taxes can reach up to 50%. The video also touches on Andorra’s strategy to incentivize business growth, creating a more favorable environment for entrepreneurs and workers. It concludes with the observation that lower taxes help sustain the country’s economy.

Takeaways

• 😀 Andorra offers significantly lower taxes compared to Spain, with rates much more favorable for both individuals and corporations.
• 😀 The main taxes in Andorra include personal income tax (IRPF), corporate tax, and indirect taxes like the General Indirect Tax (IGI), which is similar to Spain's VAT.
• 😀 Personal income tax in Andorra is structured in a way that income up to €24,000 is tax-free, while income between €24,000 and €40,000 is taxed at 5%, and over €40,000 at a maximum rate of 10%.
• 😀 In contrast, Spain has much higher income tax rates, with the maximum rate going up to 50% depending on the region, making Andorra's tax system significantly more attractive for high earners.
• 😀 Andorra's tax system includes an exemption on dividends from Andorran companies and capital gains on shares if ownership is less than 25%, which is not the case in Spain where these are taxed more heavily.
• 😀 Andorra's corporate tax rate is set at 10%, far lower than Spain's general rate of 25%, creating a much more favorable environment for businesses.
• 😀 There is no inheritance tax or wealth tax in Andorra, which contrasts with Spain, where these taxes can be significant, especially on high-net-worth individuals.
• 😀 The General Indirect Tax (IGI) in Andorra is only 4.5%, significantly lower than Spain's standard VAT rate of 21%, making products and services cheaper for consumers in Andorra.
• 😀 Andorra has tax treaties with various countries, including Spain, to avoid double taxation and regulate fiscal competition, benefiting individuals with cross-border ties.
• 😀 Despite lower taxes, Andorra maintains a sustainable public welfare system due to lower government spending, focusing on essentials like health and education, while reducing unnecessary expenditures.
• 😀 Andorra’s tax policy is designed to encourage private business growth and job creation, which in turn fuels economic prosperity and sustains the country’s social security system.

Q & A

What are the main differences between taxes in Andorra and Spain?

Andorra has much lower taxes compared to Spain. For instance, the income tax rate in Andorra is capped at 10%, while in Spain, it can go up to 50% depending on the region. Additionally, Andorra does not have taxes on inheritance, donations, or wealth, which are present in Spain. Andorra also offers favorable conditions for companies, with corporate tax rates at 10% versus Spain’s 25%.

What taxes are applicable to individuals in Andorra?

In Andorra, individuals are subject to personal income tax (IRPF), which includes both general income (such as wages and business profits) and savings income (like capital gains and dividends). The tax rates are 0% for incomes up to 24,000 euros, 5% for incomes between 24,000 and 40,000 euros, and 10% for incomes above 40,000 euros.

How does Andorra’s income tax compare to Spain's for individuals?

In Andorra, the income tax is much lower. For income over 40,000 euros, the rate is 10%, while in Spain, it can rise to almost 50% depending on the region. Moreover, Andorra offers a higher exemption threshold, with the first 24,000 euros being exempt from taxation, compared to Spain's exemption of 22,000 euros for individuals with only one income source.

Are dividends and capital gains taxed differently in Andorra compared to Spain?

Yes. In Andorra, dividends from Andorran companies are exempt from personal income tax, and capital gains from the sale of shares are also exempt, provided the individual owns less than 25% of the company. In contrast, Spain taxes dividends and capital gains at rates ranging from 19% to 28%, with no such exemption.

What is the IRNR tax in Andorra and who is subject to it?

The IRNR (Impuesto sobre la Renta de No Residentes) is a tax applied to individuals and entities that are not tax residents in Andorra but earn income from services provided within the country, such as maintenance or conferences. Non-residents are subject to a 10% tax rate on income earned from Andorra-based activities.

How is corporate tax structured in Andorra compared to Spain?

Corporate tax in Andorra is set at a flat rate of 10% on the net income of companies, while in Spain, the general corporate tax rate is 25%. Andorra also has exemptions for certain types of income, such as dividends from Andorran companies, which are not subject to tax.

Does Andorra have a wealth tax or inheritance tax?

No, Andorra does not impose a wealth tax or an inheritance tax. This is a significant advantage compared to Spain, where both taxes apply, with wealth tax varying by region and inheritance tax depending on the relationship between the deceased and the heir.

What indirect taxes exist in Andorra?

The primary indirect tax in Andorra is the IGI (Impuesto General Indirecto), which is similar to VAT in Spain. The standard rate is 4.5%, with reduced rates of 1% and 0% for certain goods and services. This is much lower than Spain’s VAT, which ranges from 4% to 21%, with a general rate of 21%.

What is the tax on property transactions in Andorra?

In Andorra, the tax on property transactions is the ITP (Impuesto de Transmisiones Patrimoniales), which is set at 4%. This rate is significantly lower than the corresponding tax in Spain, which varies between 6% and 10% depending on the region.

Why are taxes in Andorra so low?

Andorra’s low tax rates are part of a strategy to attract businesses and wealthy individuals to the country. The government keeps public spending low, which reduces the need for high taxes. This includes limiting the public sector and focusing on essential services like healthcare and education.