Tax, Social and Accounting Obligations for Companies in Andorra
Complying with tax, social, and accounting obligations in Andorra is not only a legal requirement but also a critical factor in maintaining a company’s competitiveness and reputation. Transparency and adherence to legal deadlines build trust with third parties and prevent penalties. Below is a concise overview of the key obligations that Andorran companies must address.
Key Tax and Social Reporting Obligations
Tax / Social Contributions | Frequency | Basis / Rate | Filing / Payment Deadline | Notes |
IS (Corporate Income Tax) | Annual | Basis: accounting profit Rate: 10% (general) | - Filing: July 1–31 of the year following the fiscal year-end - Payment: September | 50% reduction in the tax liability for the first year |
IGI (General Indirect Tax) | Monthly / Quarterly / Semi-annually (based on revenue volume) | Rate: 4.5% (general) | Based on revenue volume: - <€250,000: July and January (prior six-month period) - €250,000–€3.6M: April, July, October, January (prior quarter) - >€3.6M: Monthly (prior month) | Filing for the prior period |
IRNR (Non-Resident Income Tax) | Quarterly | Rate: 10% of the paid invoice | - Filing: July 1–31 of the year following the fiscal year-end - Payment: September | Mandatory withholding by the Andorran payer |
ITP (Property Transfer Tax) | At the time of sale | Basis: actual value of the transferred asset Rate: 4% (general) | Payment: Upon signing the public deed before a notary | Taxpayer: Buyer |
CASS (Social Security Contributions) | Monthly | Basis: gross salary Total: 22% (6.5% employee / 15.5% employer) | Payment: 1st–15th of each month | The employer withholds the employee’s 6.5% and contributes 15.5% as its own obligation |
Key accounting obligations
Filing of annual accounts
All public limited companies and limited liability companies domiciled in Andorra, as well as foreign companies operating through a branch, must file their annual accounts with the Andorran Companies Register (Registre de Societats Mercantils). These accounts must accurately reflect the company’s economic and financial position and be prepared and signed by the directors within six months of the fiscal year-end.
Depending on the case (simplified or full accounts), they must include:
- Balance Sheet
- Profit and Loss Statement
- Statement of Changes in Equity
- Cash Flow Statement
- Notes to the Financial Statements
These documents, along with supporting accounting records, must be retained for at least six years to ensure availability for tax or corporate inspections.
Exemption from Filing Annual Accounts: Individual entrepreneurs with annual revenues below €150,000 are exempt from filing annual accounts for fiscal years starting in 2024 and 2025. From 2026, this exemption applies only if they are taxed under the simplified assessment regime. Exceptionally, directors of commercial companies, as individuals, are also exempt if their income does not exceed this threshold.
Mandatory audit for large companies in Andorra
Large companies must have their annual accounts audited by a legally authorized auditor, as required by Article 72 of Law 20/2007 on public limited and limited liability companies.
A company is considered large if :
- for two consecutive fiscal years, it meets at least two of the following criteria:
- Assets exceeding €3.6 million
- Annual turnover exceeding €6 million
- More than 25 employees
- Additionally, companies with annual turnover exceeding €10 million for two consecutive years are also considered large, even if they do not meet the other criteria.
Audited accounts must be filed with the Companies Register in compliance with Andorran accounting regulations.
Accounting violations and penalties
Law 30/2007 of December 20, on entrepreneurial accounting, establishes accounting obligations that companies must fulfill. Non-compliance may constitute an administrative violation, classified as minor, serious, or very serious.
Financial penalties range from €90 to €6,000, depending on the severity of the violation, the size of the company, the degree of intent, and the impact of the accounting irregularity.
Examples of serious violations include failing to retain accounting documents, correspondence, and supporting records related to business activities for six years from the date of the last annual closing.
Very serious violations include:
- Failure to maintain mandatory accounting records, such as the general ledger or inventory and annual accounts book
- Failure to appoint an auditor when legally required, particularly for consolidated annual accounts
Conclusion
Strict compliance with tax, social, and accounting obligations is essential to ensure the stability and sustainable growth of your company in Andorra. Within a clear and predictable regulatory framework, proper administrative management fosters trust among stakeholders and prevents future liabilities.
Our firm is available to advise and assist you in meeting these obligations, providing tailored services to support decision-making and optimize your resources.