Special Regime for Holding Activities

Stock or limited companies whose corporate object is exclusively the activity of management and holding stakes may take advantage of a total exemption from Andorran tax by adhering to the Special Regime on Holding Stakes in foreign companies.

The dividends or stakes in the profit of non resident companies in Andorra, as well as the yield obtained from conveyance of the relevant stake are exempt from taxation in the Principality of Andorra.

The stakes in the capital of the Stock Holding Company must be nominative.

The profit distributed against this yield receives the following tax treatment:

• If the receiver is resident or a permanent establishment, it shall be exempt.

• The Principality of Andorra does not apply withholdings to the non resident shareholder and, on the other hand, any non resident natural or legal person is exempt from Non Resident Revenue obtained from dividends and other yield from holding stakes in the net assets of companies that are Andorran tax residents.

Granting the Special Regime of a Foreign Securities Holding Company is on condition that the relevant application be presented to the Andorran Minister of Finance.

Special Regime for Activities of International Intangibles Exploitation, or Activities in International Commerce

The taxpayers may benefit from an 80% reduction on the tax base for revenue that arise from concessions or authorisations for use, assignment of licenses, of rights, conveyance of assets, goods or rights or provision of the services mentioned below:

• Industrial property rights to patents, designs, models and industrial drawings, brands, domain names, etc.

• Granting authorisation for use, assignment or licensing rights to drawings, formulas or secret procedures, rights to informations regarding industrial, commercial or scientific experiences.

• Assignment of rights to industrial property (literary, artistic or scientific works, audiovisual productions, computer programs, etc.).

• Image rights activity may only obtain benefit from application of this regime when the main activity is management of image rights of unrelated natural persons and when they have adequate material and personal resources.

• Conveyance of assets assigned to the aforementioned activities.

• The activity of international sale-purchase of goods and commission broking located outside the territory of Andorra (including real estate located outside Andorra).

Application of the reduction in tax base is subject to the following conditions:

• Exploiting the asset concerned on their own behalf within the framework of their economic activity.

• Having one person hired at least half day and premises with a minimum area of 20m2 in the Andorran territory to perform such activities.

• Use of those rights by the assignee in performance of an economic activity.

• The assignee of the services is not an entity that is tax resident in Andorra and the right or service is not used directly in the Principality

Granting the Special Regime for International Intangibles Exploitation or International Trading Activities is on condition that the relevant application be lodged with the Ministry of Finance and duly authorised.