Read the untranslated law here: https://www.bopa.ad/bopa/023005/Pagines/6AB96.aspx
Law 94/2010 of 29 December, on the tax on income of non-tax residents since the General Council in its session of December 29, 2010 has approved the following: Law 94/2010, of 29 December, on the tax on income of non-tax residents reason and justification of the income tax of non-tax residents the tax on companies as well as the submission of the income of entrepreneurs and individual professionals to a tax on economic activities of individuals, form a panorama in which the income from the exercise of economic activities, with individual or corporate support some form of direct tax.
In this framework, it should be a rule that, for reasons of equality and tax justice, create a tax similar to the incomes of economic activities carried out in Andorra to individuals or entities non-residents tax and for labour income perceived by individuals non-tax residents. Since the non-tax resident natural persons in Andorra are not subject, in principle, to the social security scheme of the Principality, nor are not included in the subjective scope of application of the taxes on companies and on economic activities of individuals, has been to establish a tax on the income of non-resident tax video all the income from the exercise of economic activities or that these individuals obtain Andorran source. Logically, the absence of taxation for individuals tax residents of the capital income also determines that the non-tax resident individuals are outside the walls of the tax where it obtained an income of this nature. This is not the case of the entities in general, since the configuration of the income tax as a tax total income recorded synthetic society determines that the tax on income of non-resident tax when the tax obligation is a non-resident entity, the top tax on all income of Andorran source obtained by the non-resident tax. In short, to be the principles of equality and economic capacity the cornerstones of our tax law, the tax on income of non-resident tax, intended to simply be an add-on that will allow them to achieve a degree of symmetry in tax matters with respect to the taxation that falls on the subjects, individuals or entities, tax residents in Andorra and burn so substantially equal tax residents and non-residents.
In addition, the tax on income of non-tax residents pursues a purpose analogous with the tax on companies and justified for the same reasons that this tax: it is, in short, to place Andorra in the international context as a country with an Orthodox order, par and comparable with that of the surrounding countries, the European Union and the OECD, and who understands that the signing of agreements for the Elimination of double taxation is key to development of its economy. In this sense, the tax follows the broad lines of the tax on non-residents of the most advanced countries, although it does not lose sight of the purpose of the income tax to create a competitive environment that facilitates the attraction of investments in the Principality of Andorra. At the same time, it aims to be one of the essential pieces of our taxation system that will allow them to establish a network of agreements to eliminate double taxation.
II guiding principles and structure of the tax The complementarity of this tax in respect of the tax on companies determines that the guiding principles of this tax-coordination and international compatibility, transparency and simplicity rules and competitiveness-have guided the development of this standard.
It is necessary to underline, however, that the tax on income of non-residents with respect to corporate taxation tax has important distinguishing features that justify the regulation in a separate law.
III fundamental aspects of the law due to the peculiarity of the legal system of the Principality, it is essential in this law to give a clear definition of taxable the tax. In addition to the required tax and regulate other figures such as heads, retainers and representatives of taxable, pivoted on the management of the tax, especially in the form of non-tax residents taxpayers without permanent establishment.
To link an income in the territory of the Principality, the law uses two types of connection points. On the one hand, using the internationally accepted concept of "permanent establishment", which gives rise to one of the modalities of the tax. On the other hand, will define the specific connection points of the types of income that the non-resident tax may be obtained in the territory of the Principality of Andorra.
Both in one case as in the other, tax rates are, for imperative of the principle of neutrality and non-discrimination, identical to those defined for the societies tax residents in Andorra. In addition, this is an essential condition for the positive resolution of the future negotiations of agreements to avoid double taxation, taking into account the content of the article 24 of the OECD Convention model.
Formally the law is structured in 41 articles, a transitional provision and five final provisions.
Chapter i. nature and scope of application of the tax Article 1 nature and subject to the income tax of non-tax residents is a tribute of a personal nature and gravel, in the terms established by this law, the income obtained in the territory of the Principality of Andorra to the natural or legal persons non-tax residents in this.
Article 2 scope of application this tax is applied to all 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 taxable taxable taxable Article 4 Are of this tax natural persons and legal persons non-tax resident in the Principality of Andorra, which obtain income in this area.
For these purposes, are considered to be tax-resident in the Principality of Andorra, the legal persons defined in article 7 of the law on the tax on companies and individuals defined in article 8 of the law on the tax on the income from economic activities.
Article 5 responsible for
1. Respond in solidarity tax debt corresponding to the revenue that you have satisfied or the income of the property or the rights, repository or the management of which has been entrusted to, respectively: a) the payer of income accrued in favor of taxable that operate without mediation of permanent establishment, or;
b the trustee), the head or the Manager of the property or rights of taxable that operate without mediation of permanent establishment.
2. not to be understood that a person or an entity meets a performance when is limited to make a simple mediation of payment. It is understood by "simple mediation of payment" the payment of an amount per account and order of a third party.
3. In the case of the payer of income accrued without mediation of permanent establishment by the taxable non-tax residents, the actions of the Ministry in charge of finances can be understood directly with the person in charge, which is enforceable tax debt. The same procedure is applicable in the case of the trustee, the head or the Manager of the property or rights of the taxable non-tax residents, not intended for a permanent establishment.
4. income tax debts severally Respond pertaining to permanent establishments of non-tax resident taxable persons who, in accordance with the provisions of article 6, are their representatives.
5. When the lack of income tax debt of the tax attributable to the non-resident tax required to be actions and omissions of persons to whom this precept considered responsible, their behavior can be subject to corresponding sanctions, and may require the person in charge, together with the tax debt corresponding to the non-resident tax, the corresponding sanction.
Article 6 representatives of the taxable non-tax residents 1. The taxable non-tax residents are required to appoint, before the end of the period of Declaration of income obtained in Andorra, a natural or legal person with residence in Andorra, to represent the Ministry in charge of finance in relation to their obligations to this tax when, due to the amount or characteristics of the income obtained in the territory of Andorra to the tax obligation , required by the Ministry responsible for finance.
2. The required non-resident tax attorney, or his representative, are required to communicate to the Ministry in charge of finances for the appointment, duly accredited, in the period of one month from the date of this appointment. The communication must be accompanied of the express acceptance of the representative.
3. In the case of breach of the obligation to the appointment provisions of the preceding paragraph, the Ministry in charge of finance may be considered representative of the permanent establishment who appears as such in the register of Companies or, if not there, those who are empowered to enter into contracts on behalf of the non-tax resident tax required.
Article 7 tax address 1. The taxable non-tax resident in the territory of Andorra have their tax domicile, for the purposes of fulfillment of the obligations, to Andorra: a) When they operate in Andorra through a permanent establishment, the place where you get the effective administrative management and direction of the company in the territory of Andorra.
b) When obtaining income from real property in the tax domicile of the representative and, if it is not there, in the place of location of the property in question.
c) In the remaining cases, the tax address of the representative or, if there is, in the retainer or the party responsible for solidarity.
2. when it had not appointed a representative, the notifications made in the tax address of responsible for retaining and solidarity have the same value and produce the same effects as if they had practiced directly to the tax obligation. The same validity, in the absence of designation of representative by persons or entities non-residents tax and in the absence of responsible for solidarity, have notifications that can be practiced in any of the properties owned by the company.
3. Any change of address to tax part of the required non-tax resident tax should be reported to the Ministry in charge of finance, in accordance with the provisions of article 23 of the law on the bases of the Tax Ordinance, from 19 December 1996.
Chapter III. Income subject to taxation and ways of subject Article 8 Fact Generator 1. Constitutes the fact generator for the production of income, monetary or in kind, in the territory of Andorra, on the part of taxable of that tax, in accordance with what is established in the following articles.
2. Are not subject to this tax the investment income defined in the article 13 when they are obtained by non-tax resident natural persons in Andorra.
3. Are not subject to this tax the interest and other income earned by the assignment to third parties of own capital referred to in the agreement between the Principality of Andorra and the European Community concerning the establishment of measures equivalent to those provided for in Council Directive 2003/48/EC on taxation of savings income in the form of interest payments , approved by the law 11/2005, of June 13.
4. Either are subject to this tax capital gains derived from the transfer of real estate property or rights over the same made by non-tax residents persons who act without mediation of permanent establishment, provided that they are subject to the tax is regulated by the law 21/2006, of 14 December, on the tax on capital gains on the transfer of real estate.
5. Will boast paid, except in the contrary, benefits or transfers of goods, services and rights that can generate income subject to this tax.
Article 9 Income obtained in Andorran territory 1. Are considered to be income in the Andorran territory from activities carried out within the territory mentioned, the coming of the assets located in Andorra or the coming of exercitables rights or usable in the Principality.
2. In particular, are considered income in the Andorran territory all those that are met by legal persons resident in Andorra, or for individuals, who are entrepreneurs or professionals resident in Andorra; except that the income corresponding to rights or benefits contracted, made and used outside the territory of Andorra.
Article 10 rules of taxation The taxable of this tax will follow the following rules of taxation:
1. When the income is obtained through a permanent establishment in Andorra, it will pay for the whole of the income attributable to the permanent establishment, irrespective of the place of production of the same.
2. When the income is obtained without permanent establishment in Andorra, taxed individually and separately for each of the income obtained.
Article 11 Income attributable to a permanent establishment 1. It is understood obtained in Andorra and the economic activities when this income is attributable to a permanent establishment located in Andorra.
2. It is understood that a physical person or a non-tax resident company operates by means of permanent establishment in Andorran territory when, by any title, held in this territory, on an ongoing basis or usual, of a fixed place of business of any kind, through which the organization carries out all or part of its activity. In particular, it is understood that constitute permanent establishment: a) the direction, b), c) branch offices, d) factories, e) workshops, warehouses, stores and other similar establishments, f) mines, the quarries, farms, forestry or livestock trails, or any other place of exploration or extraction of natural resources, and g) construction, installation or Assembly , the length of which exceeds twelve months.
3. Notwithstanding the provisions of the preceding paragraph, it is considered that the expression "permanent establishment" does not include: a) the use of facilities solely for the purpose of storing, expose or deliver goods or merchandise belonging to the enterprise;
b) the maintenance of a deposit of goods or merchandise belonging to the enterprise with the sole purpose of storing them, expose them or deliver them;
c) the maintenance of a deposit of goods or merchandise belonging to the enterprise with the sole purpose to be transformed by another company;
d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information for the enterprise;
e) the maintenance of a fixed place of business solely for the purpose of performing for the enterprise any other activity of a preparatory or auxiliary;
f) the maintenance of a fixed place of business solely for the purpose of carrying out any combination of the activities mentioned in the lyrics above, provided that the overall activity of the fixed place of business resulting from this combination to keep your character preparatory or auxiliary.
4. Notwithstanding the provisions of the previous sections, when a person other than an independent agent acting on behalf of a company and have and exercise on a regular basis in Andorra powers that the facultin to conclude contracts in the name of the company, it is considered that this company has a permanent establishment in that territory.
5. It is not considered that a company has a permanent establishment in Andorra, for the simple fact that carries out its activities within the territory of Andorra through a broker, a general comissionista or any other independent agent, provided that such persons are acting within the framework of the ordinary activity.
6. The fact that a company tax resident in a third State control or be controlled by a company resident in Andorra or that perform business activities on Andorran territory (whether through a permanent establishment or otherwise), does not convert alone in any of these companies in permanent establishment of the other.
7. When the person or the entity non-tax resident does not operate through a permanent establishment, is considered income obtained in the Andorran territory in the following cases, provided that the income could not be included in any other type of income set out in this chapter: a) in the case of rendering of services used in the territory of Andorra, particularly those relating to the realization of studies , projects, technical assistance and management support. Are understood used in Andorran territory which serve to economic activities carried out in the territory of Andorra or relating to property situated in this territory. When these benefits will serve partially to economic activities carried out in the territory of Andorra, are considered to be obtained in Andorra, only for the part that serve to the activity carried out in Andorra;
b) when derived, directly or indirectly, of the performance in the Andorran territory of artists and athletes, or any other activity related to this performance, even if they are perceived by a person or an entity other than the artist or athlete.
Article 12 labour Income 1. The performance of the work considered income in the Andorran territory when derived, directly or indirectly, from a personal activity developed in this territory.
Have the qualification of labour income all compensation or utilities, whatever their denomination or monetary in nature, or in kind, which may arise, directly or indirectly, of the personal work or the employment relationship and do not have the character of performance of economic activities. In particular, they have this consideration are salaries and wages, the remuneration fee of representation, the grants and stock options granted in the framework of an employment relationship.
2. Also have the consideration of income derived from the work of the following: a) The pensions and other similar benefits, when derived from a given occupation in Andorran territory or when they are met by a person or entity tax resident in the territory of Andorra or to a permanent establishment situated in the area. Caps are considered to be public or private pensions met by reason of a previous employment, regardless that they are perceived by the worker or by another person.
b) remunerations of the directors and the members of the boards of Directors, boards that have a Board of directors or their representative bodies of a tax resident in the territory of Andorra.
Article 13 investment income are considered income in the Andorran territory investment yields the following:
a) dividends and other income derived from the participation in the equity of tax residents in Andorra. In particular, the term "dividends", in the sense of this precept, includes the income of actions, the actions or the good of enjoyment, the stakes, the parts of the founder or other rights, except those of credit, which allow them to participate in the utilities of an entity to the status of partner, shareholder, partner or participant.
b) interests, meaning that this term adopted in article 6 of law 11/2005 of 13 June, on the application of the agreement between the Principality of Andorra and the European Community concerning the establishment of measures equivalent to those provided for in Council Directive 2003/48/EC on taxation of savings income in the form of interest payments When they are paid by persons or entities tax residents in Andorra or when to pay benefits of capital used in the Andorran territory.
c) yields from capitalization transactions and contracts of life insurance or disability held with institutions or entities tax residents in Andorra. Are understood to be included in this group, the benefits paid by pension funds or instruments of social protection equivalent or their management companies to tax residents in Andorra, or by permanent establishments of fund management and pension plans are located in the territory of Andorra.
of) The income from participations in investment funds, pension plans or similar instruments and insurance contracts where the investment funds, pension or insurance company are non-tax residents in Andorra and the trustee, administrator or Manager of the participations and contracts or of the payment of the benefits is a tax resident in Andorra or a permanent establishment of a non-tax resident in Andorra , or the investment is carried out through open accounts in Andorra with fiscal resident or non-resident.
e) the satisfied by persons or entities tax resident in the territory of Andorra or by permanent establishments situated in that territory, or that are used in the territory of Andorra. Have the consideration of standards the amounts of any kind paid by the following concepts:-any concession or authorization of use or assignment or license of rights on patents, designs, models and industrial drawings, trademarks, domain names and other distinctive signs of the company, as well as other industrial property rights;
-any concession or authorization of use or assignment or license of rights on plans, formulas or secret procedures, of rights to information concerning industrial, commercial or scientific experience, including the techniques and methods of business, marketing or the concession of use of industrial, commercial or scientific equipment;
-any concession or authorization of use or transfer or license of copyright on literary, artistic or scientific works, including audiovisual productions and programs, applications and computer systems, as well as the neighbouring rights to the rights of the author;
– payments for the use of image rights.
f) Other investment yields not mentioned in the previous sections. To this effect, are considered investment income the utilities or the contributions, whatever their name or nature, money or in kind, coming, directly or indirectly, of assets, goods or rights, the ownership of which corresponds to the required tax and are not intended for economic activities carried out by this tax must, or derived, directly or indirectly , personal property or rights located in the Andorran territory.
Article 14 Other income 1. They are considered as income in Andorra yields derived, directly or indirectly, of real property located in the territory of Andorra or of rights relating to such property.
2. Also considered income in Andorran territory holding gains arising from variations in the value of the assets of the tax required to be set out on the occasion of any alteration in the composition of this heritage value, except that term in this chapter as an income of a different kind, in the following cases: a) When derived from securities issued by persons or entities tax resident in the territory of Andorra , except those issued in the secondary markets of the Member States of the European Union and member countries of the OECD.
b) When derived from other values, other than personal property, situated in the Andorran territory or rights that have to be met or trainers in the Andorran territory.
c) when you come, directly or indirectly, of real property located in the territory of Andorra or of rights relating to such goods. In particular, it considered included:-economic gains derived from rights or shares in an entity, tax or non-resident, the assets of which is made up of mainly, directly or indirectly, to real estate located in the Andorran territory;
-holding gains arising from the transfer of rights or shares in an entity, tax or non-resident, which attributed to the owner the right to enjoyment on real estate located in the Andorran territory.
d) When incorporated into the heritage of the required non-tax resident tax assets located in the territory of Andorra or rights that have to be met or the trainers in this territory, though not derived from a previous transmission, such as earnings on the game.
3. It is estimated that there is no alteration in the composition of the heritage in the following cases: a) in the case of Division of the common thing;
b) on the dissolution of the Association of profits, on the termination of the marital economic regime of participation or the termination of the marital economic regime of separation of property, when legal or taxation ruling will produce awards due to different from the compensatory between spouses;
c) on the dissolution of communities of property.
In any case, the goods and the rights to which apply the previous letters retain the original acquisition value, without which the circumstance that it describes it implies a revaluation.
Likewise, it is considered that there is no profit or losses in the case of capital reduction. When the reduction of capital, whatever its purpose, gives rise to the depreciation of securities or shares, are considered to be the redeemed shares acquired in the first place, and the acquisition value is distributed proportionally among the rest of homogeneous values remain in the assets of the taxpayer. When the reduction of capital does not affect in the same way all values or the shares owned by the taxpayer, is understood to have referred to the acquired in the first place. However, when the reduction of capital is to the return of contributions, the amount of this repayment reduced accordingly the value of acquisition of values affected, until its cancellation. The excess that could be is considered a dividend.
4. Not considered obtained in the territory of Andorra yields the following: a) are satisfied by reason of international sales of goods, including the mediation commissions on these sales, as well as the accessorial fees and related;
b) are satisfied to persons or entities non-tax residents in Andorra to permanent establishments located abroad, charged to these establishments, when the corresponding benefits are linked with the activity of the permanent establishment abroad.
Article 15 Income exempt income are exempt the following: a) in the case of natural persons tax non-residents:-salaries and wages received by workers hired for non-tax resident companies established or resident in the Principality of Andorra, which refers to article 12, when they are subject to the social security scheme of the Principality of Andorra and to remain in this scheme.
-The compensation as a result of civil liability for personal injury, legal or recognized in the amount legally. The same treatment is applicable to the compensation paid by the Government of Andorra for personal injury as a result of the functioning of public services.
-Compensation for dismissal made in improperly, unfair or unjustified of the worker, in the amount established with mandatory in law 35/2008 of 18 December, of the code of labour relations, in its regulations or, where applicable, in the regulations on the execution of sentences, cannot be considered as such the established under agreement , Covenant or contract, in the amount that exceeds the required amounts indicated.
-The benefits recognized in the non-resident tax required by the social security tax of Andorra or the entities that the overriding as a consequence of absolute permanent disability or severe disability.
-Public grants received for regulated studies, both in Andorra as abroad, at all levels and degrees of the educational system with the limits to be determined by the regulations.
-Literary, artistic or scientific awards relevant, with the conditions to be determined by the regulations.
b) investment income to which refers article 13 when they are perceived by non-tax resident entities.
c) of the incomes obtained in the transmission of the participation of entities tax residents in Andorra, of separation of the Member and of settlement of the entity, the part of the income corresponding to the reserves with a charge to the income exempt from what will referred to in paragraph 1 of article 20 or article 21 of the law on the tax on companies. It is also exempt the income obtained in the transmission of the participation of the entity resident in Andorra in accordance with differences in value attributable to the shares in non-resident entities in tax that the company, the shares of which are transmitted and meet the requirements to be applied to the exemption established in paragraph 1 of article 20 of the law on the tax on companies , or value differences attributable to assets or items intended for permanent establishments that the entity resident in Andorra have abroad and in relation to which it is to apply article 21 of the law on the tax on companies.
of) The income from the shares or shares in collective investment institutions regulated by law 10/2008, of 12 June, regulating collective investment bodies of Andorran law, excluding the management entities of this type.
Article 16 forms of subjection and related-party operations 1. The taxable non-tax residents who obtain income through a permanent establishment situated in the territory of Andorra are taxed by the whole of the income attributable to that establishment, whatever the place of their obtaining, in accordance with articles 17 to 24.
The taxable non-tax residents who obtain income without mediation of permanent establishment are taxed separately for each full or partial accrual basis of income subject to taxation, without it being possible to any compensation between these incomes, in the terms provided for in articles 25 to 35.
2. the transactions carried out by taxable non-tax residents with persons or entities linked to them are of application the provisions of article 16 of the law on the tax on companies.
For that purpose, are deemed to be individuals or entities associated with those mentioned in paragraph 1 of article 16 of the law on the tax on companies. In any case, it is understood that there is a link between a permanent establishment situated in the territory of Andorra with its parent company, along with other permanent establishments of the aforementioned parent and with other persons or entities related to the parent company or its permanent establishments, whether they are located in the Andorran territory as well as abroad.
Chapter IV. Taxable income tax for non-resident through a permanent establishment Article 17 Income attributable to permanent establishments 1. Make up the income attributable to the permanent establishment the profits obtained by the required non-resident tax attorney in Andorra through a permanent establishment situated in the territory of Andorra and, in particular, the following: a) the returns of the activities or financial operations carried out by the permanent establishment mentioned;
b) the returns derived from assets allocated to the permanent establishment;
c) gains or losses arising from assets allocated to the permanent establishment.
They are considered as assets in the permanent establishment are defined according to article 14 of the law on the tax on the income from economic activities.
2. In the case of re-export of goods or transfer property and rights previously imported or intended for the same forced non-tax resident tax in a permanent establishment situated in Andorra is considered: a) That has not produced any property alteration, without prejudice of the treatment applicable to payments made for the period of use, in the case of items of fixed assets imported temporarily.
b) That there has been a heritage alteration, whether it is of items of fixed assets acquired for use in the activities carried out by a permanent establishment. Altering heritage recordable in Andorra for this tax is the difference between the market value of the goods or the right at the time of its transfer to the permanent establishment and the market value of the property element mentioned at the time in which it is affected or was set up by the permanent establishment in Andorra, descomptades, if applicable , the corresponding depreciation and made the corrections that are coming from the axes.
c) there have been performance, positive or negative, of an activity or economic exploitation, for items that have the stock consideration. The income attributable to the permanent establishment, when the acquisition or subsequent transmission to take place with the parent of the permanent establishment or with related parties within the meaning of article 16 of the law on the tax on companies, is the difference between the market value of the goods or the right acquired and its market value at the time of the transmission.
3. It is considered that there has been a heritage alteration in case the permanent establishment cease its activity in Andorra in relation to the goods and the rights that you are destined for. For the purpose of quantifying income attributable to the permanent establishment in this case, applies the same rule provided in the letter b) of the preceding paragraph.
Article 18 diversity of permanent establishments When a contributor has several centers of activity in the territory of Andorra, it is considered that these centres of activity constitute a single permanent establishment.
Article 19 determination of the basis of taxation 1. The basis of taxation of the permanent establishment shall be determined in accordance with the provisions of the income tax Act, without prejudice to the provisions of the following letters: a) for the determination of the basis of taxation are not tax deductible payments that the permanent establishment run to the parent company or any of its related entities or permanent establishments in fees , interest, commissions, paid in consideration for technical assistance services or for the use or transfer of assets or rights.
But what has been prepared previously, are tax deductible interest paid by permanent establishments of foreign banks to their parent company or to other permanent establishments, for the realization of its activity.
b) for the determination of the basis of taxation is tax deductible the reasonable part of the cost of management and administration in the corresponding general permanent establishment, provided that the following requirements are met:-reflection in the statements of the permanent establishment;
-consistency, through informative report submitted with the claim, the amounts, the criteria and delivery modules;
-rationality and continuity of the allocation criteria adopted.
Is understood to have fulfilled the requirement of rationality of the criteria of attribution when these criteria are based on the use of factors made by the permanent establishment and the total cost of the factors mentioned above. In any event, apply article 16 of the law on the tax on companies on related-party operations.
In cases where it is not possible to use the criterion stated in the preceding paragraph, the allocation will be made according the relationship in what will be one of the following magnitudes:-turnover;
-costs and direct costs;
-average investment in tangible and intangible fixed assets items in real estate investments for activities or economic operations;
-average total investment in items intended for activities or financial holdings.
c) under no circumstances are attributable amounts corresponding to the cost of own capital of the entity intended, directly or indirectly, to the permanent establishment.
Article 20 tax rate and share of taxation 1. The tax rate for taxable of this tax, which operate through a permanent establishment, is 10 percent.
2. The payment of tax is the amount resulting from applying the base of taxation, determined in accordance with the previous articles, the tax rate regulated in section 1.
3. the share of taxation of the income tax apply deductions provided for in articles 43 and 45 of the law on the tax on companies to determine the settlement fee.
4. the settlement fee is deducted the payments on account regulated in article 24.
5. When the amount of the payments to the account actually made during the financial year exceed the amount resulting from the liquidation of the Ministry in charge of finance proceeds to repay the excess.
Article 21 tax accrual Period and 1. The tax period coincides with the tax year declared by the permanent establishment, cannot exceed 12 months.
When it had declared another different one, the tax period is understood to refer to the calendar year.
The communication of the tax period must be formulated at the time in which they have to submit the first claim for this tax, and it is understood subsistent for subsequent periods while not be modified explicitly.
2. It is understood that the tax period has concluded when: a) the permanent establishment ceases its activity, b) carries out the transformation of the investment at the time with respect to the permanent establishment, c) is the transmission of the permanent establishment to another individual or entity, d) there's dissolution and, where appropriate, liquidation of the owner of the parent company , e) when he dies your holder, in the case of permanent establishments of individuals.
3. The tax is payable on the last day of the tax period.
Article 22 Declaration the Declaration by this tax must be present and sign up on the site, the date and method to be determined by the regulations.
Accounting obligations, formal and 1. The permanent establishments are required to carry a separate accounting, referred to the operations carried out and the assets that are intended, as established in law 30/2007, of December 20, the accounting for entrepreneurs.
2. They are also required to comply with the other obligations of a formal accounting, tax or registration required to the entities resident in the territory of Andorra by the rules of the law on the tax on companies.
3. The Ministry responsible for finance must create a record of non-tax resident entities in which they have to register individuals and organizations that operate in Andorra through a permanent establishment and have been to sign up anyway in the register of Companies. These entities will be subject to the same regime that is applicable to the entities fiscal residents in accordance with articles 47 to 52 of the law on the tax on companies, in the terms and with the adaptations that are necessary in accordance with the characteristics of these entities non-tax residents.
Article 24 payments on account and obligation to make the retention of permanent establishments Are taxable to act through a permanent establishment are subject to payment on account that regulate the articles 45 and 46 of the law on the tax on companies.
Chapter v. income tax for non-residents taxable without mediation of permanent establishment Article 25 tax Base 1. In general, the tax base of the tax corresponding to the yields obtained are taxable without mediation of permanent establishment is made up of the total amount of accrued income.
2. The tax base corresponding to the income derived from operations of reinsurance is constituted by the amounts of the premiums ceded to reinsurance, non-tax resident, reassegurador.
3. The basis of taxation for capital gains arising from the transfer of property or rights located in Andorran territory, is determined by applying to each property alteration to occur, the rules set out in articles 26, 27 and 28.
4. In the event of the transfer of a right or right arising from an acquisition in profit, is left-luggage office as normal value acquisition value of the market for the item purchased.
5. In the event of the transfer of a right or a right to profit, is left-luggage office as transmission value the market value of the asset or right at the time of the transmission.
Article 26 general rule about the amount of the profits or the losses the amount of the profits or losses is: a) in the case of onerous transmission or for gain, the difference between the values of acquisition and transmission of heritage;
b) in other cases, the market value of the assets or proportional parts, if necessary.
Article 27 rules of evaluation of economic gains in the transmission charges for 1. The value of the acquisition is made up of the sum of: a) the actual amount by which the acquisition said it had been carried out;
b) the cost of the investments and improvements made in the goods purchased and the expenses and taxes related to the acquisition, excluding the interests that have been satisfied by the acquirer.
2. The value of the transmission is the actual amount by which the transfer had been effected. This value must be deducted the expenses and taxes that are required in the transmission referred to in the letter b) of paragraph 1 when are pleased to transmitent. For real amount of the value of alienation takes the indeed satisfied, if not is lower than the normal market value, in which case prevails this value.
3. In the case of real property, the gain obtained is reduced by 20%.
Article 28 specific rules applicable to the valuation gains and losses 1. It is considered that the transmission of preferential subscription rights generates an equity gain recordable by the amount obtained by the transmitent.
2. In the case of partially released, the acquisition value is the amount actually paid by the taxpayer. In the case of actions fully released, the value of the acquisition both of these actions as well as those of which come is to deliver the total cost by the number of titles, both the old as the released corresponding.
3. the non-cash contributions to Andorran companies, when the wealth profit is subject to taxation in Andorra, the value is determined by the difference between the value of acquisition of the goods or rights contributed and the amount of the following: a) the nominal value of the shares or the social shares received by the contribution, or , the corresponding part. This value must be added the amount of premiums of issue.
b) the value of the contribution receipts the day that will formalize the contribution or immediately prior.
c) the market value of the goods or the right contributed.
The transmission value calculated in this way is taken into account to determine the value of acquisition of the securities received as a result of the non-monetary contribution.
4. In cases of separation of members or dissolution of Andorran companies, is considered earnings or losses, without prejudice to the corresponding to the society, the difference between the value of the social settlement fee or the market value of the goods received and the value of acquisition of title or corresponding capital participation.
5. In the exchange of goods or rights, including the stock exchange, the gain or losses is determined by the difference between the acquisition value of the asset or right that gives and the higher of the following two: a) the market value of the goods or the right handed;
b) the market value of the goods or the right what you get in return.
6. In the new additions of property or rights that are not derived from a transmission, it is counted as an equity market value.
7. The regulations, you can set specific rules of realization of the values of transmission or transmission of heritage when there may be doubts about the application of the General rules covered in this law.
Article 29 share of taxation The tax share is obtained by applying to the tax base determined in accordance with article 25 the following tax rate: a) in general, the 10 to 100;
b) in the case of income derived from operations of reinsurance, the 1.5 to 100.
Settlement fee and deduction to remove internal double taxation 1. The settlement is the result of subtracting the tax fee deduction for internal 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.
Article 31 the fee Deductions can only be deducted the withholding tax and the revenue on account that they had practiced on the income of the non-tax resident tax required.
Article 32 accrual basis 1. The tax is paid: in) if it comes to yields, when are required or on the date of payment if this were before.
b) in the case of property gains, when took place the patrimonial alteration or transmission.
c) In all other cases, when the corresponding income are required.
d) in the case of income charged to tax non-resident taxpayer as a consequence of axes made by the Ministry in charge of finance, income is understood to have accrued on the date on which it was to carry out the payment; then is the subject of an adjustment in virtue of the powers that are attributed to the Ministry responsible for finance.
2. In the case of the death of the taxpayer, all pending income imputation are understood required on the date of death.
Article 33 Statement 1. The taxable non-tax residents who obtain incomes in the Andorran territory without mediation of permanent establishment are required to submit a declaration, with the determination and payment of the corresponding tax due, for this tax in the form, the site and the terms established by the regulations.
2. Can also make the statement and the payment of debt responsible for solidarity defined in article 5.
3. Not required in the taxable non-tax residents the presentation of the statement corresponding to the income in respect of which he had practiced the retention or made the payment on account, what will referred to the articles 34 and 35.
4. When a non-tax resident tax required take a self-assessment has harmed in some way their legitimate interests, you can urge the correction of such payment in accordance with the procedure for the regulations.
Article 34 People and organisations with required to retain and enter account 1. Have the consideration of retaining the individuals or entities to which this article imposes the obligation to enter the Ministry in charge of finance, on the occasion of the payments made to taxable defined in article 4.
2. Is considered compulsory in practice income to the person or entity that satisfies the taxable income in kind defined in article 4.
3. Have considered to be obliged to make payments to your account are taxable to which section 24 imposes the obligation to pay amounts on account of the tax obligation of payment of the tax before the time at which the payment obligation is enforceable.
4. Are required to practice the retention and income into account with respect to the income subject to this tax that would satisfy or obtained by: a) tax-resident entities in the territory of Andorra, including those regulated entities or self-employed heritages 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;
b) natural persons tax resident in the territory of Andorra who carry out economic activities, in accordance with the definition that, for this purpose, use the law of income tax of the economic activities, with respect to the income they satisfy or obtained by in the exercise of these activities;
c) the taxable non-tax residents that operate through a permanent establishment or without, when pay income recorded by this tax.
5. In no case are not forced to practice the retention or payment on account of the diplomatic missions or consular offices of foreign States in Andorra.
Article 35 retention policies and payment on account 1. The subjects required to retain retain or enter the account an amount equivalent to the result of applying the arrangements provided for in this law to determine the tax debt corresponding to the taxable tax non-residents without a permanent establishment.
Without prejudice to the above, for the calculation of the payment on account is applied that is held by the regulations.
2. The subjects required to retain or to enter account must assume the obligation to make the payment to the Ministry in charge of finance, without the breach of this obligation are I can excuse.
3. You don't have to practice the retention or payment on account in respect of: a) the income that are exempt by virtue of the provisions of article 15 or an agreement to avoid double taxation which is applicable, without prejudice to the obligation to declare.
b) taxable income paid to non-residents paid tax or without permanent establishment, when establishing the payment of the tax or the provenance of hold;
c) the income referred to in article 24 of the law on the tax on companies.
4. The subject required to retain and practice income account must submit the Declaration and make the payment to the Ministry in charge of finances in the place, the way and the deadlines laid down, of the amounts retained or the payments on account made, or negative statement when it had not proceeded his practice. In addition, you must submit an annual summary of the withholding tax and the revenue to the content to be determined by the regulations.
The subject required to retain and practise payments on account are required to keep the relevant documentation and to issue a certificate proving the withholding tax or payments on account made. The scope of these obligations should establish formal regulations.
5. In the case of transfers of real property situated in the Andorran territory carried out by taxable non-tax residents who act without permanent establishment, the notary attesting the operation or, if not applicable, the acquirer, has or does not have the status of forced to retain in accordance with section 1 of the previous article, is obliged to retain and enter the 5 to 100 , or to carry out the payment on account, corresponding to the agreed consideration, by way of payment on account of the tax corresponding to these real estate.
The obligation to retain established in this section applies equally in relation to the transfer of shares or social interests of entities in which more than 50 to 100 of the value of these actions proceed, either directly or indirectly, from property situated in the territory of Andorra. Likewise, the above-mentioned application is required to retain in relation to the transfer of shares of companies that had carried out capital increases during the two years prior to such shareholder transmission when prior to this capital increase more than 50 to 100 of the value of these actions came, directly or indirectly, from property situated in the territory of Andorra.
Do not proceed the payment on account referred to in this section in cases of provision of real estate in the Constitution or increase of capital of companies tax resident in the territory of Andorra.
Without prejudice to the sanctions that may correspond to the infringement in which it had incurred, if the retention or the payment on account has not been paid, the goods shall be transmitted to the payment of the amount used is lower among the aforementioned retention or payment on account and corresponding tax. In the case of transfers of shares of companies whose main assets are properties in Andorra, the properties and actions are related to the payment of the tax corresponding to the transmission of the latter.
Article 36 Returns 1. When a non-resident tax has forced fiscal supported an unfair retention or greater than the share of the tax on income of non-resident tax, you can apply to the Ministry in charge of finance repayment of the excess over the quota for this tax. Are understood in this case returns the cases in which the withholding tax exceeds the limits practised in the source set to a double taxation agreement concluded by Andorra.
To this end, practiced the tax self-assessment in the model determined by the Ministry in charge of finance.
2. The Ministry in charge of finance comes, if necessary, to make these refunds dictating the provisional settlement, and without prejudice to the practice of the settlements further temporary or permanent, they are coming from. The provisional settlement that established the origin of the return should be dictating in a period not exceeding three months counted from the date of filing of the application of the tax obligation.
The Ministry in charge of finance returns to the tax obligation within the period of one month, the excess over the quota of taxation that was enforceable in accordance with the provisions of this article. After this period without having made the return of the excess, the tax obligation is entitled to that he paid the legal interest to which refers article 38 of the law on the bases of the Tax Ordinance, from 19 December 1996.
3. In addition to the taxable non-tax residents, can submit return requests referred to in paragraph 1 of this article are responsible for support services as defined in article 6.
4. The procedure and the method of payment for the returns referred to in this article are determined by the regulations.
Chapter VI. Infractions and sanctions Article 37 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 38 types of infringements 1. Simple offences are considered mild in nature: a) the incomplete information without importance in the settlement;
b) failure to comply with the requirements of information and/or documentation.
2. It is considered simple infringement of a serious breach of the obligation referred to in paragraph 1 of article 6.
3. Are considered to be offences of defrauding: a) the non-presentation of the payment;
b incomplete information on the importance of the settlement with);
c) false information.
Article 39 Penalties 1. The infractions are sanctioned by a fine simple mild character set between 150 euros and 3,000 euros.
2. The simple grave of infringement is sanctioned by a fine set of 3,000 euros.
3. The offences of defrauding are sanctioned by a fine proportional to between 50% and 150% of the let down.
4. The penalties are set following the graduation criteria established in the law on the bases of the Tax Ordinance, from 19 December 1996.
Article 40 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 VII. Order of jurisdiction and administrative jurisdiction competent jurisdiction Article 41, 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.
Transitional provision. In the case of income tax base with permanent establishment during the first year of application of the tax in the case of income obtained through permanent establishment, the tax base corresponding to the first tax period is calculated in accordance with the rules of this law, but weighing to the proportion between the months elapsed in 2011 on the total number of months of your tax year.
First final provision. Modification of the law on the bases of the Tax Ordinance
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 income accrued from the 1st of April 2011.
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
Search Translated Laws of Andorra