Is Andorra losing its glow as an expat tax and residency haven
|Published:||30 Jul at 6 PM|
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The mountainous refuge has been popular with expats looking to minimalise their tax liabilities for 40 years or so, due mainly to its lack of income tax and choice of attractive properties costing less than the Channel Islands and Monaco. The first blow fell when the government turned its back on its reasonable residency requirements.
Previously just a returnable €30,000 government deposit and proof of renting a property, residency nowadays must be accompanied by a €50,000 deposit and the purchase of Andorra property worth over €350,000. Even worse news is that the government is planning to bring in income tax for the first time from 2016.
Given that tax rates are expected to be low, with the first €24,000 tax free, the next €16,000 taxed at 5 per cent and sums over and above €40,000 at 10 per cent, it’s still an unwelcome development. Real estate agents in the country argue that, for example, Jersey and Gibraltar’s tax rates are double the amount proposed by the Andorran government.
Advantages of taking the relocation plunge include a spectacularly low crime rate, an established expat community, good sports and leisure facilities and either free state education or the rated international school. Winter sports fans will need little or no encouragement provided they can meet the criteria.
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Andorra is having to introduce tax to avoid being blacklisted by governments. This way the country will continue to enjoy all the benefits of being a safe and highly developed country with free movement of assets. High net worth individulas will still pay tiny sums of tax relative to elsewhere in Europe and have the peace of mind that their finaces are totally above board. Andorra is amazing place and it is well worth high worth business people or retirees considering for residency.