Andorra VAT Rate (IGI)

VAT in Andorra, the indirect tax called Impost General Indirecte (IGI) is usually called painless, as that fee ends up dissolved in the price system, having a perception of the product cost is the total amount. However, in Andorra indirect taxation is quite low, although due to the process of tax harmonization, the fiscal framework in Andorra is similar to systems in surrounding countries and respects international standards, but with much lower rates. Read this guide to discover all details about Andorran indirect taxation (tax equivalent to VAT in the UK, IVA in Spain, or TVA in France).


What is IGI in Andorra (VAT)?

IGI is the acronym used in Andorra for VAT. IGI stands for General Indirect Tax (Impost General Indirecte). Tax is levied on the supply of goods and services carried out in Andorran territory by businessmen or professionals for consideration, on a regular or occasional basis, in course of economic activity, as well as on imports. In other words consumption. For this purpose, it is understood by:

The IGI in Andorra replaced:

IGI did not replace:

VAT/IGI Structure and Tax Rate

In regards to the structure of IGI, tax is divided into brackets, led by the general rate of 4.5%. In addition to these, there are the following rates:

What are the applicable IGI tax rates?

General rate: 4.5%

Super-reduced rate: 0% Applicable to:

Reduced rate: 1% Applicable to:

Special rate: 2.5% Applicable to:

Increased tax rate: 9.5% Applicable to:

VAT Liquidation and Simplified Regime

For the liquidation of IGI tax, as the businessman or the professional bears IGI, when acquires goods or services and then passes it on at the time of the sale of goods or when he renders services, both amounts are simply subtracted, thus resulting in IGI to be paid by the professional (IGI of goods sold – IGI of goods acquired).

This is done by means of a periodic declaration to the Andorran tax authorities so that the result obtained is the amount of IGI to be paid and credited to the tax authorities or the amount of IGI to be refunded by the tax authorities. The periodicity of this declaration depends on the annual turnover of the immediately preceding year, and in the case of imports of goods, the tax is settled in the manner provided by the corresponding customs legislation.

An interesting thing to note about IGI in Andorra is the special simplified liquidation regime. It can be voluntarily applied by businessmen or professionals when the amount of the supplies of goods and services performed does not exceed the annual figure of €100,000 and once this regime has been opted for, it will be maintained for a minimum period of three years.

Under this regime, the tax liability is determined by subtracting an estimated input IGI from the IGI charged in the tax assessment period. This estimated IGI is based on percentages applied on the annual income figure and varies according to the type of economic activity; commercial activities 3% and the rest 1.5%. The rest of the procedure is the same, that is to say, periodically a declaration is made and the amount resulting from the subtraction is paid (or collected).

Taxpayers must submit IGI declaration periodically based on the annual turnover for the set of activities carried out in the previous year:

In the case of imports of goods, the tax is paid in the manner provided for by the relevant customs legislation.

Who Pays IGI? Repercussion and Transfer of the Tax

According to the Andorran tax system, IGI is applied to consumer goods but is paid by the suppliers of the good or service (businessmen, self-employed, etc.), taxpayers pass on the tax in full to the users for whom they carry out the taxed operation, although it is basically the same thing since it means an additional cost for the supplier and a surcharge for the claimant. The latter is obliged to bear it as long as the transfer of the tax is in accordance with the provisions of the Andorran Law.

The transfer of the tax is made by means of an invoice or substitute document, and the amount charged is recorded separately from the tax base, even in the case of prices fixed administratively, indicating the tax rate applied. In the case of imports of goods, the tax is transferred by means of the corresponding document issued by Andorra Customs.

Other Indirect Taxes

As mentioned at the beginning of the article, Andorra not only has the general indirect tax as a consumption tax or final good. Andorra introduced also the following taxes: