VAT in Andorra

IGI: Value Added Tax

IGI (Indirect General Tax) is the tax applicable to goods, imports and services provided on Andorran territory, equivalent to VAT in the UK, IVA in Spain or TVA in France. The person responsible for paying it is the final consumer when purchasing a product or receiving a service. There are 5 types of IGI tax in Andorra:

  • The standard rate of 4.5%, is the lowest rate in Europe.
  • The super-reduced rate of 0% applicable to health and social assistance, educational services, sports and cultural services carried out by public or non-profit organizations, ambulance transport, housing rentals, medicines reimbursed by the CASS, the transfer of housing exempt from real estate transfer tax, for the acquisition of first homes, stamps and effects stamped by their face value and the purchase of gold as an investment.
  • The reduced rate of 1% applies to food except alcoholic beverages, water for feeding or watering and books, magazines and newspapers that do not contain only advertising.
  • The special rate of 2.5% applies to the transport of persons and their marketing minus cable transport. The following services, as long as they are not provided by the public administration: libraries, visits to museums, art galleries, natural sites such as zoos or botanical gardens, historical sites, theater, musical and audiovisual performances, educational, cultural or social exhibitions, art objects, collections or antiques.
  • The increased rate of 9.5% related to banking and financial services.

Who should make the IGI tax settlements in Andorra?

Entrepreneurs and businesses who paid the IGI and collect it at the time of sale are obliged to file periodic IGI declarations with the tax authorities. The result between the received and paid IGI and the invoiced and charged IGI will be a payment in favor of the Tax Administration or an amount to be returned.

The settlement of this tax depends on the annual turnover based on the previous year:

  • Semi-annual presentation, July and January, for annual volume from 250,000 euros.
  • Quarterly presentation, April, July, October and January, if the annual volume is over 3,600,000 euros.
  • The rest of the cases have to make the monthly settlement.

There is a special simplified regime which can be applied if your annual turnover does not exceed 100,000 euros. It is voluntary and you will have to maintain it for a minimum period of 3 years.

If you need more information about the General Indirect Tax (IGI) in Andorra or a personalized advice, you can arrange an appointment with our agents.