Undoubtedly, this is one of the questions that has been raised in recent years by the media, press, as well as by many followers of influencers who live in this country. Now, is Andorra really a tax haven?
There is no consensus on whether Andorra is a tax haven. However, the European Union and the Organization for Economic Cooperation and Development (OECD) in 2018 ruled it out as such, excluding it from the list of places considered as tax havens.
On the other hand, the non-governmental organization Oxfam did include this country in its list given its low tax burden and justifying that the revenues contributed to the country as a percentage of GDP were minimal.
One of the determining factors for declaring a country to be a tax haven is banking secrecy, i.e., the prohibition to disclose information on client accounts to persons outside the financial entity. In the case of Andorra, during 2017 it allowed the exchange of information with the European Union and the OECD, thus achieving in 2018 to get out of their blacklists and being excluded by both parties as a tax haven, as we have commented.
Whether or not Andorra is a tax haven, what is an undeniable fact is that in this small country located in the Pyrenees is taxed much less than in Spain: 4.5% for VAT, compared to 21% in Spain. Corporate income tax is 10% compared to the general rate of 25% in Spain. The IRPF in Andorra is not applied to salaries lower than 24.000€ per year, being in Spain this amount of 14.000€ with some exceptions. From this amount it goes in accordance with the income, never being higher than 10% in any case. In Spain, on the other hand, it is up to 53%, which is a considerable difference that has made well-known "YouTubers" and other public figures to move to this country.
On the other hand, there are those who have taken Andorra as more than just a country in which to pay less taxes. This is the case of former Barça coach Pep Guardiola, who kept an undeclared account in Andorra with 500,000 euros between 2007 and 2010, thus avoiding paying taxes in Spain. This revelation has been part of the so-called "Pandora's papers", which consist of an international investigation of the International Consortium of more than 600 journalists from 117 different countries, in which its main objective is to detect secret asset activity, covert agreements and hidden fortunes of a swarm of rich and powerful people, such as offshore companies that evade taxes, etc. Already 600 Spaniards and 35 international mandatories have been uncovered in this scheme.
