{"id":4283,"date":"2021-03-19T12:04:16","date_gmt":"2021-03-19T12:04:16","guid":{"rendered":"https:\/\/ancei.com\/taxation-of-cryptocurrencies-in-andorra\/"},"modified":"2024-10-28T16:00:39","modified_gmt":"2024-10-28T16:00:39","slug":"taxation-of-cryptocurrencies-in-andorra","status":"publish","type":"page","link":"https:\/\/ancei.com\/en\/taxation-of-cryptocurrencies-in-andorra\/","title":{"rendered":"Taxation of cryptocurrencies in Andorra"},"content":{"rendered":"

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OBLIGACIONES FISCALES PARA RESIDENTES Y NO RESIDENTES<\/span><\/h1>\n

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ANCEI | CRYPTOCURRENCY TAXATION IN ANDORRA<\/span><\/h1>\n

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With its favorable political stability, strategic location, and regulatory environment, \u00a0Andorra offers substantial opportunities for businesses entering the crypto industry<\/strong>.<\/p>\n

Although cryptocurrencies are not recognized as legal tender, the sector benefits from a robust regulatory structure and a government proactively and actively updating its legal framework for digital assets. Andorra\u2019s regulatory approach underscores its commitment to fostering technological innovation while ensuring robust compliance with legal and financial standards in the digital asset sector.<\/p>\n

Andorra\u00b4s journey towards digital regulation began in 2020 with the government\u2019s action plan Horitz\u00f3 23<\/strong>. Horitz\u00f3 <\/em>is a government action plan initiated by Andorra in 2020 with the goal of modernizing the country and positioning it as a forward-thinking hub for digital innovation<\/strong> and economic diversification. The plan encompasses a range of legislative and regulatory reforms aimed at fostering digital transformation, attracting international investment, and encouraging growth in emerging sectors like digital assets and blockchain.<\/p>\n

One significant outcome of Horitz\u00f3 23<\/em> is the Digital Assets Law<\/strong><\/em> (Law 24\/2022)<\/strong>, which provides a legal framework for cryptocurrency and blockchain activities in Andorra<\/strong>, including regulatory guidelines for businesses and protections for investors. This law exemplifies Andorra’s commitment to creating a clear and progressive regulatory environment as part of its larger vision to embrace technological and economic shifts through Horitz\u00f3 23<\/em>.<\/p>\n

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CRYPTOCURRENCY AND THE TAX AUTHORITIES<\/h2>\n

It’s important<\/span> to know that unless you live in a country where gains from holding or exchanging cryptocurrencies are not taxed at all, you will have to record your cryptocurrencies, as well as find out how to pay taxes for them correctly,<\/strong> before the next tax season. Therefore, if you own bitcoins or any other cryptoactive, you should know the regulation that cryptocurrencies must be subject to in your country, since, probably, you should be paying taxes on your accumulated income or you could be falling into a crime of tax evasion,<\/strong> among others. In Spain, for example, the sale of cryptocurrencies can be understood as the sale of currencies or stocks.<\/strong> Therefore, if you are spanish or french,<\/strong> and subject to capital gains to such taxation, you will be paying considerably more than anyone else in the world. As holding cryptocurrencies can be assimilated to currencies or stocks, you can consequently take them with you if you change residence, taxed on said gain, for tax purposes, where you end up effectively residing.<\/p>\n

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The exit tax<\/em> is a tax or levy that affects those Spanish residents who (fulfilling a series of requirements<\/a>) decide to transfer their tax residence to a country that does not belong to the European Union (such as Andorra) or to the European Economic Area. This tax especially affects large estates. For example, those who own shares in companies valued at more than \u20ac 1,000,000 or a portfolio of shares of more than \u20ac 4,000,000 must pay the exit tax. Which can lead us to the following approach: if cryptocurrencies in Spain must be taxed as shares, should I pay the exit tax<\/em> if I have more than a million in crypto assets? NO. Although cryptocurrencies must be taxed as shares, because they are not subject to a specific regulation, cryptocurrencies are not shares and, therefore, you will not have to pay the exit tax<\/em> for their possession. Which greatly facilitates your residence transfer to a country like Andorra.<\/p>\n

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CRYPTOCURRENCY TAXES IN ANDORRA<\/h2>\n

In Andorra, cryptocurrency taxation is quite favorable compared to its neighbors, France and Spain.<\/p>\n