Law 96/2010 of 29 December, on the tax on the income from economic activities since the General Council in its session of December 29, 2010 has approved the following: law 96/2010 of 29 December, on the tax on the income from economic activities reason and justification of the creation of the tax on the income from economic activities the establishment in Andorra of the income tax required to be also applying to the benefits obtained by residents when these have not adopted, for the carrying out of its activities, corporate form. It is as well to avoid a discriminatory tax treatment between the yields obtained by legal persons and those obtained by individuals.
The tax is structured according to the internationally defined standards and, especially, in the context of the Organization of economic co-operation and development (OECD) to facilitate the positive resolution of the future negotiations to sign agreements to avoid double taxation.
The modernisation of the fiscal framework with the introduction of the tax figures in force in the Member States of the European Union involves the removal of taxes and other tax figures that seem to make sense; so, the repeal, which establishes the law of income tax, of the law of the rate on the register of holders of economic activities, of 20 December 1995, the taxable benefit of this law.
II guiding principles of the tax on the income from economic activities the articles of the law on the tax on the income from economic activities follow the guiding principles of the tax on companies; However there are specific in their structure that required for legislative clarity a separate text.
At the same time to articulate the rules of the income tax, it has tried to bring to the last consequences the principle of transparency, which requires that the tax rules are clear and intelligible, so that their application may be made with the maximum legal certainty for taxpayers. It has been intentionally fleeing the solutions especially complex can be found in many legal systems, with the purpose of allowing persons who exercise an economic activity in the Principality of Andorra to apply a tax that does not cause problems due to their complexity rules.
III fundamental aspects of the tax on the income from economic activities the tax on the income from economic activities has synthetic character, so subject to encumbrance of a unitary all income obtained by natural persons tax resident in Andorran territory that carry out an economic activity. The synthetic nature of the tax simplifies the application on the part of taxpayers and allows for adaptation of this tribute with the principle of neutrality.
On the basis of taxation is given the possibility to make a simplified estimate of the expenses to deduct in order to simplify the management of the tax on the part of the taxable.
The regulation of the mechanisms for the Elimination of international double taxation economic and is inspired by European models are more developed, in line with the principle of international compatibility that inspires the tax. It has also been incorporated here provisions to avoid the abusive use of these mechanisms of elimination of double taxation.
Formally the law is divided into 39 articles, two additional provisions, a transitional provision and five final provisions.
Chapter i. nature and scope of application of the tax Article 1 Nature the tax on economic activities is a tribute of a personal nature and gravel, in the terms established by this law, the income arising from the conduct of the economic activities of the individuals living in Andorra.
Article 2 scope of spatial application the income tax of the economic activities is applied throughout the territory of the Principality of Andorra.
Article 3 Treaties and agreements the provisions of this Law shall be understood without prejudice to the provisions of treaties and international agreements that have become part of the internal legal system.
Chapter II. The fact is the generator generator generator Article 4 actually Made the obtaining of income from the realisation of economic activities on the part of the tax obligation, irrespective of the place where it occurred and whatever the tax residence of the payer.
Article 5 economic activities 1. Are economic activities which involve the Organization for its own account of human and material factors of production or of any of these factors of production, in order to intervene in the production or distribution of goods or completion of services.
2. The activities of the lease and sale of real estate have the consideration of economic activity and, in accordance with article 16, the tax base is reduced with a minimum of € 40,000 to determine the payment basis.
Article 6 Presumption of income The transfers of goods and rights in the various modalities will boast paid for its normal value market, except in reverse.
Chapter III. The taxable taxable Article 7 1. Are taxable in the income tax natural persons having their fiscal residence in Andorran territory and carry out an economic activity in accordance with the definition of article 5.
2. The income corresponding to the realization of economic activities by civil societies, inheritance jacents, communities of goods and all those entities or autonomous assets regulated in the second paragraph of the letter a) of section A) of article 15 of the law on the bases of the Tax Ordinance, from 19 December 1996, is allocated to its members, heirs, commoners or unitholders in accordance with the regulations or agreements applicable in each case or in equal parts in the absence of these , joined in this tax when these are individuals.
Article 8 Residence tax and tax address 1. Are considered to be tax-resident in Andorran territory individuals in which will give any of the following circumstances: a) That remain more than 183 days during the calendar year, in the territory of Andorra. To determine this period sporadic absences will be calculated in Andorran territory, except that the required certified tax your tax residence in another country.
b) That get in Andorra the kernel or the base of their activities or their economic interests, either directly or indirectly.
2. Is presumed, except in the contrary, the tax must have tax residence in Andorra when, in accordance with the criteria of the previous section, is tax resident in Andorra the spouse not legally separated, and minor children of age.
3. it is presumed, except in the contrary, the tax must have tax residence in Andorra when the Andorran nationality or holding a residence permit granted by the competent authorities of Andorra. In the same way, it is assumed the status of non-tax residents in Andorra to the individuals that present a passport or a document of identity issued by foreign authorities or are headlines, unless you can prove that the tax residence in Andorra, in accordance with the criteria above, using any means accepted in law.
4. Not considered tax residents in Andorra the workers daily move in the territory of this country from Spain or France and who have been hired by companies tax residents in Andorra or permanent establishments of foreign companies in Andorra.
5. The Andorran nationals, as well as the spouse not legally separated, and minor children of legal age, who have their habitual residence abroad by their status as members of diplomatic missions or representations in international organizations are considered fiscal residents in Andorra.
6. The fiscal domicile of the taxable tax-resident in the territory of the Principality of Andorra is derived from the application of the rules to the effect that article 23 of the law on the bases of the Tax Ordinance, from 19 December 1996.
Article 9 Individualisation of income 1. Income is considered to be obtained by those who perform in the conventional manner, personal and direct the Organization of the means of production and human resources devoted to the activity.
2. It is assumed that meet these requirements the owners of the economic activities, except in reverse.
Chapter IV. The basis of taxation Article 10 basic Concept of taxation The tax base consists of the total amount of the income of all the economic activities of the tax obligation in the tax period.
Article 11 determination of the basis of taxation 1. The basis of taxation is determined by the direct method of determining, by the system of determination objective and, moreover, by the indirect method of determining, in accordance with the provisions, in the latter case, article 29 of the law on the bases of the Tax Ordinance, from 19 December 1996.
2. The direct estimation of the tax base allows a simplified method that is applied on a voluntary basis when the net amount of the annual turnover of the business activities carried out by the tax obligation the period immediately preceding tax is less than the amount predicted by the simplified regime of the accounting of the additional provision law 30/2007, of December 20, , of the accounting for entrepreneurs and is established in article 13.
Article 12 rules for the determination of the income in the scheme of direct determination 1. The determination of the income from economic activities in the form of direct general estimation is carried out in accordance with the rules of the income tax, without prejudice to special rules laid down in this law.
2. Regarding the deduction of costs, will take into account the following rules: a) are tax deductible write-offs in relation to property and rights for the economic activity carried out in accordance with article 10 of the law on the tax on companies. They cannot be subject to deduction of the tax base the depreciation, value corrections or provisions which may be made on the assets or rights that are considered not intended for economic activity.
b) are not tax deductible contributions from the employer or professional to pension plans or social instruments that fulfil a similar function.
c) are not tax deductible contributions of taxation which, in his case, the tax must have been paid to the communal tax on income from tenants, to the communal tax of moment of commercial activities, business and professional, and the tax on capital gains on the transfer of real estate.
d) when it is duly accredited, with the appropriate employment contract and the membership corresponding to Social Security, that the spouse or children of the compulsory tax law routinely and continuity in the economic activities developed by this forced, is deducted for the determination of the remuneration stipulated with each of them, as long as they are not superior to those of the market corresponding to their professional qualifications and work accomplished.
e) When the spouse or children of the tax required to perform transfers of assets or rights, accredited by the corresponding contracts, they serve the purpose of the economic activity in question, it follows, for the determination of the income of the owner of the activity, the consideration stipulated, provided that does not exceed the market value. The burden of proof of this market value corresponds to the employer or professional, and the deduction is denied if it is not possible to prove it.
Article 13 determination of the basis of taxation under the simplified determination of the basis of taxation under the simplified method is carried out in accordance with the model provided in Annex I.
The Government will establish regulations the conditions, timelines and other formal aspects relating to the determination of the tax base in the simplified mode.
Article 14 rights and Goods intended for an economic activity 1. Are considered to be property and rights intended for an economic activity are the following: a) The real estate in which it carries out its activity the taxpayer.
b) assets intended for economic and socio-cultural services of personnel at the service of the activity. Not considered to be "designed" the goods for leisure and recreation or, in general, private use of the owner of the economic activity.
c) any other property element that is necessary for obtaining the revenue from the economic activity. In any case do not have this active consideration of participation in equity or equity of an entity and the transfer of capital to third parties.
d) in the case of heritage elements that serve only partially to the object of the economic activity, the effect is understood as limited to the part of these heritage items that really is used in the activity in question. Under no circumstances are subject to partial indivisible heritage involvement.
2. The affectation or tax of goods and rights to economic activity that will follow as part of the heritage of the positive or negative income tax does not generate required to tax effects.
Except in the case that the tax will produce by reason of termination of the activity, if the transmission to third parties occurs before three years have elapsed, it is considered that the tax of goods or rights generates income tax effects positive or negative.
Article 15 Evaluation of operations 1. The assessment of operations between the taxable subject to this tax, and other individuals or entities is carried out by the normal value of the market, in the terms of article 16 of the law on the tax on companies.
2. In any case, are valued in accordance with their normal value market goods or services which are taxable give or lend to third parties not linked free of charge or intended use or personal use.
Likewise, when there is a consideration, and this consideration is notoriously less than the normal value in the market of goods and services, it will take this as a criterion of assessment.
Article 16 the payment basis: reduction of the base of taxation 1. The tax base is reduced with a minimum of € 40,000 to determine the payment basis.
2. The basis of payment may not be negative.
Article 17 negative tax Bases The negative tax bases that have been the subject of settlement or payment can offset the positive tax base of the same tax required to be generated over the next ten years.
Chapter v. Tax Period, accrual and temporary allocation Article 18 Tax Period 1. The tax period coincides with the calendar year.
2. The tax period is lower than in the calendar year if the death of the tax required on a different day on the 31st of December.
Article 19 the Accrual tax is payable the last day of the tax period.
Article 20 Attribution of the temporary income and expenditure that determine the income to be included in the basis of taxation in the form of direct light and general estimate is allocated in accordance with the regulations of the general accounting plan.
Chapter VI. Article 21 comprehensive fee and tax rate tax rate The tax rate applicable on the basis of payment is 10 percent.
Article 22 taxation taxation quota share is the amount resulting from applying to the basis of payment the tax rate.
Chapter VII. Settlement fee and deduction to remove double taxation Article 23 national and international settlement Payment and deduction to eliminate national and international double taxation 1. The settlement is the result of subtracting the share of tax deductions for national and international double taxation regulated by this article.
2. The payment of taxation is reduced accordingly to the amount of the tax fees met by the tax obligation to the communal tax on income from tenants, to the communal tax on the moment of commercial activities, business and professional, and the tax on capital gains on the transfer of real estate corresponding to incomes that have been integrated into the tax base of this tax.
3. When in the basis of taxation of the income tax law required integrated and recorded abroad, is deducted from the payment of tax the least of the two following amounts: a) the cash amount paid abroad by reason of a similar tax in this tax or the tax on income of non-resident tax on these incomes.
For the purpose of establishing this substantial similarity, will take into account the essential characteristics of the foreign tax, as well as if the main purpose of this tax lies in the imposition of the income obtained by the tax obligation.
Not be deducted taxes not paid by virtue of exemption, allowance or any other fiscal incentive granted abroad, unless stated otherwise in an agreement to avoid double taxation that is applicable.
b) the amount of the fee payment in the Principality of Andorra would pay for the aforementioned income if they had obtained in Andorran territory.
For the purposes of the calculation of this amount, the payment basis corresponding to the foreign income is determined in accordance with the rules of this tax, and are solely attributable to this basis the expenses specifically connected with the generation of income mentioned and the least personal and family in the part that it corresponds.
Article 24 treatment for new investments The depreciation corresponding to goods and rights for economic activity, acquired from the entry into force of this law are tax deductible according to some new coefficients of linear depreciation resulting from multiplying by 1.4 the reduction coefficients provided for in article 10 of the law of corporation tax.
Chapter VIII. Payments on account Article 25 The payment on account 1. In the months of June and December are taxable payments should be made at the expense of the liquidation corresponding to the tax period that is in progress on the last day of the month indicated.
2. Payments on account are calculated by applying the percentage of 50% on the settlement of the immediately preceding financial year.
In the case of the previous period has a duration of less than 12 months, the payment on account will be made taking into account the proportional part of the settlement of previous periods to complete a period of twelve months.
3. The payment on account has the consideration of tax debt for the purposes of article 33 of the law on the bases of the Tax Ordinance, from 19 December 1996.
Article 26 deduction of payment on account and differential fee The payment on account is deducted from the settlement fee to get the differential fee. When, by the effect of the payment on account, the differential fee is negative, the Ministry in charge of finance, has to repay the excess.
Chapter IX. Management and liquidation Article 27 tax Record
1. The taxable on the income tax of the economic activities must have a tax registration number (hereinafter NRT), which should be requested, in case you don't already possess as a taxable of indirect taxes. This number is unique for all State taxes. The request must be formalized by means of the standard form set by the Government.
2. The Ministry responsible for finance must carry a tax register in which to register individuals and entities without legal personality which are taxable to that tax.
3. The regulations are developed forms, deadlines and documents to present to the obtaining of NRT as well as the procedures for the management of the tax.
Article 28-provisional tax Record Low on the persons or entities that they are carrying out an economic activity must submit to the Ministry in charge of finance a request for baixa in the tax Registration within the period of one month, counting from the date of completion of the activity.
Article 29 obligation in collaboration with the owners of the register of Commerce and industry, the holders of the liberal professions, and the owners of the register of associations must submit to the Ministry responsible for finance, telematic, information in respect of individuals and entities, the Constitution, the establishment, modification or termination to the modifications that occur to this record , as specified by the regulations.
The same obligation lies the notaries with regard to the Scriptures and other documents that will be authorised the creation, modification, transformation or extinction of all kinds of entities.
Article 30 Declarations Are taxable must submit and sign a statement to this tax in place, the time and manner specified by the regulations.
Article 31 of the income tax debt and Payment 1. Are taxable, at the time of its Declaration, must determine the appropriate debt and enter it on the site and the form to be determined by the regulations.
2. The payment of the tax debt can be made through the delivery of assets of cultural heritage of the Principality of Andorra in the way that article 36 of the law 9/2003, of 12 June, of the cultural heritage of Andorra.
Article 32 provisional Liquidation by the Ministry in charge of finance may turn the temporary settlement appropriate in accordance with articles 54 and 55 of the law on the bases of the Tax Ordinance, from 19 December 1996, without prejudice to subsequent checks you can carry out the organs of this Ministry.
Article 33 Repayment of trade 1. When, in accordance with article 26, the differential fee resulting from the self-assessment is negative, the Ministry in charge of finance, if necessary, must practice the temporary settlement within three months following the term of the deadline for the presentation of the claim.
When the statement has been submitted after the deadline, the three months referred to in the previous paragraph will be calculated from the date of its presentation.
2. When the differential fee resulting from the payment or, where appropriate, of the temporary settlement is negative, the Ministry responsible for finance must return to craft this fee, without prejudice to the practice of further settlements, final or provisional, which prosecuted.
3. If the tentative settlement has not been practiced within the period provided for in paragraph 1, the Ministry responsible for finance must return to craft the negative differential fee resulting from the payment, notwithstanding the practice of temporary or permanent settlements further that might be coming from.
4. If it takes place within the provisions of paragraph 1 without ever ordered the payment of a refund due to causes attributable to the Ministry in charge of finance, you should apply to the outstanding amount of the refund is the legal interest referred to in article 38 of the law on the bases of the Tax Ordinance, from 19 December 1996, from the day after the end of the period mentioned and up to the date of your payment , without the need for the tax claim forced it.
5. Regulations will determine the procedure and the method of payment for the completion of the return of trade referred to in this article.
Article 34 Faculties of the Ministry in charge of finance to determine the basis of taxation for the purpose of determining the basis of taxation, the Ministry responsible for finance must apply the rules referred to in article 11.
Chapter x. infractions and sanctions Article 35 Offences Regulation infringements tax matter relating to the content of this law shall be governed by that which is not established in the present law, the regime of infractions and sanctions established in the third section of the chapter III of the law on the bases of the Tax Ordinance, from 19 December 1996.
Article 36 types of infringements 1. Are considered incomplete without information on infringements in The simple: importance of settlement).
b) failure to comply with the requirements of information and/or documentation.
2. Are considered to be offences of defrauding: a) the non-presentation of the payment.
b incomplete information on The importance of) with liquidation.
c) false information.
Article 37 Penalties 1. The simple offences are sanctioned with a fixed fine of between 150 euros and 3,000 euros.
2. The offences of defrauding are sanctioned by a fine proportional to between 50% and 150% of the let down.
3. The above penalties are set following the graduation criteria established in the law on the bases of the Tax Ordinance, from 19 December 1996.
Article 38 Notifications of infringements 1. Prior to the imposition of a penalty, must be notified to the person concerned the proposed resolution with indication of the facts charged, the precept infringed and the amount of the fine. The person concerned has a term of thirteen working days to raise everything they consider appropriate for their defense.
2. After the deadline of allegations, the competent body will issue the corresponding resolution, against which you can go in the terms established in article 72 of the law on the bases of the Tax Ordinance, from 19 December 1996.
3. In any case, and because the administrative act is in suspense, with the filing of the appeal must provide a sufficient guarantee, mortgage or a deposit or guarantee either of an Andorran Bank that guarantees the total amount of the tax debt.
Chapter XI. Jurisdictional order Article 39 competent jurisdiction The administrative jurisdiction, with the prior exhaustion of administrative remedies in tax matters, it is the only competent to determine disputes of fact and law that arise between the Ministry in charge of finance and are taxable in relation to any of the matters referred to in this law.
First additional provision. Reduction for the first year of application of the law in the first year of application of the tax the taxable enjoy a reduction of 50% of the settlement fee.
Second additional provision. Tax benefits for the creation of small businesses during the first three years 1. For taxable of this tax will constitute as new entrepreneurs a new business or professional activity and having an income of less than 100,000 euros, the tax rate applicable during the first 3 years of activity is: a) the 5% for the portion of the tax base between 0 and 50,000 euros.
b) The 10% for the remaining tax base.
2. This fiscal bonus will not be applied to taxable who carry out or have carried out any type of activity, both directly and through a company.
3. The regulations will determine the forms, deadlines and documents required to be eligible for these tax benefits.
Transitional provision. Payment on account during the first year of application of the tax for the first year of application of the tax, only required the payment on account of the month of June in article 25. This is calculated by applying the tax rate provided in article 21, on the basis of 75% of the net profit of the previous year accounting to the tax period, determined according to the rules provided in law 30/2007, of December 20, the accounting for entrepreneurs.
First final provision. Modification of the law on the bases of tax legislation the Government should be presented within a period of one year from the entry into force of this law, a draft law amending the law on the bases of the Tax Ordinance, from 19 December 1996, that adapt and update the procedures of settlement, management and control of taxes in relation to the requirements and needs of this law.
Second final provision. Update of the General Budget Law amounts can update the tax rate or the quantitative limits established by this law, without which it can not imply substantial modifications of the tax that it regulates.
Third final provision. Enabling regulations 1. It entrusts to the Government the drafting of provisions and regulations needed for the development and implementation of this law within a period of six months from its entry into force.
2. The Declaration of this tax and those of their payments on account are set by regulation, which should be set up, in addition to the form, the site and the deadlines for submitting them, the cases and conditions of your presentation by telematic means.
3. Is delegated to the Ministry in charge of finances for the management and collection of the tax is regulated by this law.
4. During the first six months of application of the tax, the taxable can make queries relating exclusively to the interpretation of the articles of the law that have to be answered by the Ministry in charge of finance and that will be binding. The Government will establish regulations the terms and the scope in which you will be able to carry out these consultations.
The fourth final provision. Application of the Tax Law is applicable to the tax periods that are started from the first day of the financial year immediately following publication in the official bulletin of the Principality of Andorra of a law of the value added tax to replace the indirect goods tax, the tax on business and professional services, the sales tax on domestic production , and the sales tax on commercial activities, and for the income accrued from that date.
Fifth final provision. Entry into force this law enters into force the day after being published in the official bulletin of the Principality of Andorra.
Casa de la Vall, 29 December 2010 Josep Dallerès Codina, General Syndic Us the co-princes the sancionem and promulguem and let's get the publication in the official bulletin of the Principality of Andorra.
Joan Enric Vives Sicília Nicolas Sarkozy President of the French Republic and the Bishop of Urgell Co-prince of Andorra Co-prince of Andorra Annex I Download the document