Criteria of a tax residency in Andorra

A residence permit in Andorra allows a person to live in Andorra, but it does not automatically change the tax residency to Andorra. Although a person can reside in different countries, only one tax residency applies. Most of the member countries of the OECD use certain criteria, which are summed up in double taxation treaties (DTT). Andorra also makes use of these criteria to determine the legal tax residency.

Different points apply to determine an Andorran tax residency. This is where the DTT plays an important role, but even without the existence of a double taxation treaty, the same factors and criteria are often applied to determine the tax residency and thus unlimited tax liability.

The three most important factors are:

  1. Living in Andorra for more than 183 days per year. A person is deemed a tax resident of the State in which he has a permanent home available to him.
  2.  The center of economic interest is in Andorra.
  3. The family lives in the country (partner and minor children). The so-called center of life interest.

If you do not fulfil any of these criteria, nationality can be a factor to determine the place of unrestricted tax liability. If a double taxation treaty exists, both tax authorities are responsible for resolving the conflict. The person concerned may ask for a certificate of tax residency in a particular country, which will then clearly determine the tax obligation in this country.

We point out that the topic of unlimited tax liability may be a very complex issue. Therefore, we strongly recommend a closer consultation with our advisors as well as our tax consultants.