WHAT ARE INDIRECT TAXES

Andorra has two main types of indirect taxes: Indirect General Tax (IGI), excise duties and customs duties on certain products.

INDIRECT GENERAL TAX (IGI)

The Indirect General Tax is a tax applied on transactions involving the delivery of goods and/or services in Andorra, by business or professional, as well as on imports. This is a tax figure equivalent to the Spanish VAT or French TVA. There are five types of IGI tax:

4,5%

GENERAL

0%

SUPER REDUCED

Rental housing, health services and medication covered by the SS, education, and investment gold

1%

REDUCED

Food and water, books and publications

2,5%

SPECIAL 

Transportation  and art

9,5%

INCREMENTED

Financial and banking services

The Indirect General Tax (IGI) is paid by the final consumer when they purchase a good or consume a service. For example, the purchase of a car in Andorra is taxed with 4.5% IGI. Companies supplying these goods and services are responsible for collecting and depositing the corresponding amount.
How often do companies that provide goods and services have to pay IGI?
– Semi-annually, when the previous financial year’s turnover is less than €250,000.

– Quarterly, when the previous year’s turnover is less than €3,600,000.

– Monthly, in all other cases.

SPECIAL TAXES

Special taxes are those levied on certain products, such as alcohol, tobacco or gasoline.

 

ALCOHOL

0,0136€/l (beer)

0,0312€/l (wine)

25€/hl pure alcohols

TOBACCO

1€/kg (sheet)

0,02€/unit (pack)

 GASOLINE

0,5€/l gasoline

0,439984€/l unleaded gasoline < 98

0,476214€/l unleaded gasoline 98

0,285285€/l diesel

0,065426€/l colored diesel

CUSTOMS TARIFFS

Andorra signed an agreement with the European Union in 1990 establishing a customs union for industrial products (25-97 in the Harmonized System). This means that, when industrial products are imported into Andorra from outside the European Union, Andorra applies the same conditions and therefore the same tariff as the other countries of the Union. The calculation of the duty payable is determined by the imported product, while the union sets the rates applicable to each product.

It should be borne in mind that Andorra is currently negotiating an Association Agreement with the European Union, which could in some respects change the current conditions. The agreement is expected to be signed in 2023.

DO YOU NEED HELP WITH INDIRECT TAXATION?

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