Why do some YouTubers and digital influencers move to Andorra? Video content creator El Rubius claims to be closer to his friends but admits that will pay lower taxes in Andorra. El Rubius is one of the most popular streamers. His videos about games are applauded among his followers. Lately, El Rubious was trending due to another reason: YouTuber, who lived in Spain, announced that he is moving to Andorra.
How Andorra seduces influencers?
What is it about Andorra that makes celebrities and millionaires fall in love with this tiny country? Magnificent landscapes, ski resorts, tranquility? Surely yes, but also advantageous taxation that trickle of large fortunes to the Principality.
The elite athletes and aristocrats like Carmen and Borja Thyssen were followed by a wave of young influencers, such as Patry Jordan, who brought millions of Spanish-speaking Internet users out of their sedentary lifestyle during the confinement with her YouTube channel. She has been living in Andorra for few years.
Currently, at least 9 from 15 of most followed Spanish YouTubers live or will move to the Principality. In Andorra, the personal income tax 10% bracket is common for everyone, regardless of income level. Despite the tax differences between Andorra and Spain, Principality is not one of the European states with the highest tax burden on taxpayers.
What are the YouTubers living in Andorra?
The most recent case is Ruben Doblas (El Rubius), who has more than 39.5 million subscribers on YouTube. However, others like Vegetta777 (32 million subscribers), Willyrex (who has two accounts, one with 18.5 million subscribers and another with 16.5 million), TheGrefg (16.3 million subscribers), or Makiman131 (13.6 million subscribers) have already moved tax residency to Andorra. Another example is Alexby11 (8.9 million subscribers).
Top 15 most followed YouTubers in Spain and their place of residence
|ElrubiusOMG||39 600 000||Andorra|
|Vegetta777||32 000 000||Andorra|
|AuronPlay||27 000 000||Unknown|
|Las Ratitas||22 200 000||Andorra|
|Mikcrack||22 100 000||Andorra|
|TheWillyrex||18 600 000||Andorra|
|TheGrefg||16 500 000||Andorra|
|Doggy Doggy Cartoons||16 500 000||Unknown|
|Makiman131||13 700 000||Andorra|
|ItownGamePlay||13 000 000||Spain|
|ElTrollino||12 700 000||Andorra|
|Little Baby Bum en Español||11 600 000||Unknown|
|Adexe y Nau||11 500 000||Spain|
|ExpCaseros||11 300 000||Spain|
How Much do YouTubers Save in Andorra?
In the Spanish General State Budget of 2021, the Government of PSOE and Unidas Podemos included a new IRPF 47% bracket for incomes above €300,000 per year. Andorra has a 10% income tax. Everyone contributes with the same percentage, regardless of the income generated, as long as you earn more than €40,000 per year.
If we estimate that El Rubius earns €4 million per year, in Spain he would be withheld €1,880,000 in personal income tax, while in Andorra only €400,000. In this case, the difference is approximately €1.5 million per year.
In parallel, Andorra comes with another tax difference concerning Spain. Andorra VAT applied in the Pyrenean country is in general 4.5%, while in Spain, mostly 21%. Therefore, Youtubers save on concepts such as advertising contracts, with more profit margins taxing in Andorra.
Another difference is found in the corporate tax: while the maximum rate in Andorra is 10%, in Spain it is 25%.
Despite these low tax burdens, the OECD and European Union stopped considering Andorra a tax haven at the end of 2018.
Between 2010 and 2011 Andorra promoted economic reforms that provided for the creation of the General Indirect Tax (the equivalent of VAT), the Personal Income Tax at a maximum rate of 10%, and the Corporate Tax. At the same time, whoever wants to apply for residency in Andorra, has to live at least 183 days in the Principality and deposit a security bond in an Andorran bank.
Andorra is a country with just over 80,000 inhabitants and a GDP of about €42,000 but grants only 850 tax residences per year. The high average income level of inhabitants and the small population allows having low taxes to support public services.
Can Andorra withstand migration pressure without changing policies?
Some voices from the opposition raised in recent years (now everything has stopped with COVID), to make a small tax increase (from 10% to 20% in personal income tax).
The YouTubers are the clear image of this movement, but they are not the only ones. There is a long list of experts in other digital businesses, business angels, or simple ‘freelance’ teleworkers who throw themselves into a country with low taxes. Now the question remains as to how long this model can last. For the time being, Andorra is betting more and more on it. Since 2011, Andorra has made internet connection and VPN services one of its flags, airport of La Seu-Andorra is almost ready to open a new communication channel with the country, construction of homes and infrastructures does not stop and the global digital economy is booming.
As a result of this trend, Andorra wants to launch a digital nomad visa program. With Andorra’s e-residency, the Principality seeks to cope with the economic crisis that the coronavirus pandemic is expected to bring.