IRNR Andorra

What is the non-resident income tax in Andorra? IRNR is a tax applied to individuals or companies obtaining income but not residing in Andorra. Examples of such income include repairs, maintenance, or other professional work, including consultancy, studies, projects, technical assistance, training, conferences, and shows.

Who Should Pay Non-Resident Income Tax in Andorra?

According to the Andorran tax system, IRNR on the income of non-resident taxpayers must be paid by companies and individuals who do not reside in Andorra and obtained benefits in Andorran territory, as they provided service in Andorra, or rent property in Andorra.

Main Incomes Subject to IRNR:

If the services are provided in Andorra:

• Repairs
• Maintenance
• Other professional work on movable or immovable property

If the services are consumed in Andorra:

• Advice, studies, projects, technical assistance, management support
• Training
• Conferences
• Shows

Others:

• Reinsurance operations
• Real estate rentals owned by non-residents
• From 2015, salaries and wages of workers affiliated with the CASS
• From 2015, pensions paid by the CASS to non-tax residents in Andorra

Non-Taxable Income:

• Dividends
• Interest and other returns on movable capital
• International sale and purchase of goods

When Should You Make the IRNR Payment?

The amount of income tax payable is in general 10% of the amount of the invoice paid. In the case of income paid in the form of fees, the tax is 5% of the invoice paid and for reinsurance 1.5%. On real estate rentals, a 20% reduction is applied to the amount received.

Andorran businesses that pay rent to companies or people who do not reside in Andorra with services performed in Andorra must comply with the following obligations:

• Withhold the amount resulting from applying the tax rate to the amount of the invoice for the tax to be paid
• Deliver to the taxpayer a certificate accrediting the withholding tax (only if the OT requests it or if the invoice does not include the withholding)
• Submit to the ministry of finance declaration of withholding and payment on account of the tax during April, July, October, or January immediately following the withholding.

A person or company that obtains income in Andorra can submit the declaration settlement individually. The law also provides that the taxpayer must appoint a tax representative when obtaining income from an individual or a permanent establishment.

IRNR Calculation Example

Businessman contracted €10,000 services from a non-resident consultant to restructure the company. Do you have to pay the tax? And how much?

1. Make a withholding on the invoice and pay the amount of the withholding to the consultant.

Tax base = €10,000
IRNR withholding = 10% X €10,000 = €1,000
Net amount to be paid = €9,000

2. At the beginning of each quarter declare the withholdings made and pay them to the Government.
Amount to be deposited = €1,000

The advisor, although being the taxpayer, does not have to file the tax return.