If you are want to incorporate and do business in Andorra, this article will educate you on the tax laws for a LLC(SL) which is the most common company structure in Andorra.

Andorra taxes corporate income on a worldwide basis. The headline percentage for income earned abroad, from our research, and these things do change, is 10%. Andorra have known exemptions to bring offshore income remitted back. Taxes are lower than average in Andorra because the effective rate of taxation on a LLC(SL) entity is 10%. However an 80% exemption may apply for companies that carry out international business involving intangible assets, international trading of goods or intragroup management and investment activities. Andorra ranks as 30th overall in terms of corporate tax rate worldwide.

The value added tax (VAT) rate in AD is 4.50%, that ranks Andorra as 26th overall with regards to VAT taxation rate internationally.

Thin capitalization mandates are not in effect. Thin capitalisation refers to any sort of laws on a business and the debt-to-asset ratios. Dividends received by holding companies may be tax-exempted and profits distributed by a holding company to its shareholders may also be exempted. Dividends are payments of earnings of the business, established by the board, to a class of its shareholders. Dividends can be either shares of stock, cash payments, or other property. Capital Gains are usually treated as business ordinary income. However, those from disposal of shares by holding companies may be tax-exempt. There is a Capital Gains Tax at a progressive rate up to 15% on the sale of local inamovable property . A capital gains tax is levied on the profits that a corporation or natural person realizes when they sell sells a capital asset for a price that is higher than the purchase price.

Andorra does not impose withholding tax on payments on dividends and interests to non-residents. Payments on royalties are subject to a withholding tax of 5%. This should be interpreted usually that the tax authorities expects relevant legal entities to pay tax on at least 5% of money remitted abroad on royalty payments.
There is no known tax on wealth in Andorra. There are no known inheritance taxes in AD. There are real property and transfer axes in Andorra. There are popular and well known credits for innovation spend that include breaks on taxation in Andorra.

The above is not tax or legal advice for your company's situation. Incorporations.io can to help you find to an expert in Andorra who can give you the proper advice. Want to work together? Click incorporate now if you are in a hurry, or press the free consultation button above.