Andorra Seeks Higher Return From Bank Tax
by Ulrika Lomas, Lowtax.net, Brussels
28 March, 2014
The Andorran Government has approved a bill imposing a ceiling on general indirect tax (IGI) deductions for banking entities in Andorra to prop up revenues from the sector.
The changes aim to boost the nation's annual IGI tax take by at least EUR4.5m (USD6.2m), to prevent further revenue shortfalls. This will allow the Government to retain the current rate of tax. The Government initially forecast income from the IGI bank tax in the first year of between EUR21m and EUR24m. The actual tax yield reached just EUR16.5m, however.
The bill also introduces a "special" reduced rate of IGI of 2.5 percent for ski stations, applicable solely to cable transport, and applies a reduced IGI rate of one percent to art collectors' trading.
Finally, the text newly allows personal tutors to benefit from a zero rate of IGI – the same rate imposed on other educational services in the Principality. The zero rate will also apply to the importation or physical delivery of investment gold.
Commenting, the Government said the bill will "correct" certain aspects of the law, and improve the management and practical application of the tax.
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