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- Basic Facts
- Statutory Labor Requirements
- Employee Income Tax In Brazil
- Employee Social Security In Brazil
- Deductible Expenses In Brazil
- Immigration In Brazil
- Value Added Tax (VAT) In Brazil
- Withholding Tax In Brazil
- Terminating Employee In Brazil
- Statutory Employee Benefits In Brazil
- Payroll In Brazil
- Business Opportunities In Brazil Section
- Why Use Global Expansion To Hire Your Employees In Brazil
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BASIC COUNTRY FACTS
Principality of Andorra
Andorra la Vella
- Catalan
- Spanish
- French
- Portuguese
77,006
Euro
.ad
+376
Euro
STATUTORY LABOR REQUIREMENTS
Probation Period
- The probation period must be agreed in writing, both for contracts of indefinite and definite duration and cannot exceed one month.
- On the managerial positions in which the agreed remuneration exceeds three times the minimum salary, the probation period may be up to three months.
Annual Leave
- Employees in Andorra are entitled to a minimum of 30 calendar days of paid annual leave after completing one year of employment with the company.
- Employees who have not worked for one year in the company are entitled to leave calculated on pro rata basis at two and a half days for each month worked.
Public Holidays
- New Year’s (1st January)
- Epiphany (6th January)
- Shrove Monday (24th February)
- Andorran Constitution Day (14th March)
- Good Friday (10th April)
- Easter Monday (13th April)
- Labor Day (1st May)
- Whit Monday (1st June)
- Assumption of Mary (15th August)
- Feast of Our Lady of Meritxell (8th September)
- Feast of the Immaculate Conception (8th December)
- Christmas (25th December)
- St. Stephen's Day (26th December)
Maternity Leave
- Working mothers are entitled to 16 weeks of maternity leave with full pay from the social security for childbearing.
- In case of multiple births, the period is extended in two more weeks by every child.
Work Hours
- Andorra’s working week comprises 40 hours.
- Every employee is entitled to a 30-minute break on every 6-hour-working-period.
Overtime
- Weekly working hours, including overtime, can never surpass a weekly amount of 60 hours.
- The maximum hour’s length per day being 12 hours.
- Annually working hours must be kept under 1800.
- In case of overnight work, the payment increases 20%, if no other agreement with the employer has been agreed upon.
- For general overtime, the following rule applies: -
- 25% surcharge for up to four hours
- 50% for hours ranging between four and eight and
- 75% for any other hour afterwards.
Notice Period
- Employment can be terminated with a ten-day notice period if it’s been less than a year of work for the company
- Notice period is ten days plus one day per every month worked, up to a maximum of thirty days, if there is more than one year of work for the company.
13th Month Salary in Brazil
- No
- There is no statutory requirement to pay the 13th or 14th month salary.
- There is no evidence that it is a customary practice to pay end of year bonuses, however other incentives -monetary or otherwise- can be negotiated.
- If employees work on the four days mandatory holidays, their wages must be either tripled or they must be given two days extra days of rest.
INCOME TAX
- Residents are subject to personal income tax on their worldwide profits and capital gains
- Nonresident individuals are taxed only on Andorra-source income
- An individual is resident in Andorra if he/she spends more than 183 days in Andorra within a 12-month period or has his/her center of economic and/or vital interests in Andorra
- Taxable income includes employment income, capital gains, moveable and immovable income, and entrepreneurial income
|
Taxable Income |
Rate (%) |
|
Up to EUR 24,000 |
0% |
|
EUR 24,001 to EUR 40,000 |
5% |
|
Over EUR 40,000 |
10% |
DEDUCTIBLE EXPENSES
- Income up to EUR 24,000 is exempt
- Relief is granted for dependent and mortgages
- A tax credit is available to resident taxpayers for foreign direct taxes incurred that are similar to the Andorra personal income tax.
- The credit is limited to the lesser of the tax payable in Andorra had the income been obtained there and the actual foreign tax incurred.
-
- The tax credit can be carried forward three tax years
|
Deductible Expenses |
|
IMMIGRATION
- All foreigners wishing to work in Andorra need work permits.
- These are obtained by employers – whether Andorran individuals or companies – on behalf of employees.
- Self-employment is not allowed until after 10 years' residence or trade in Andorra.
- A resident visa will allow you to live in the country for longer than the 90-day tourist allowance.
- There are two main options available: passive residency and active residency.
- Andorra’s passive residency program offers visas to individuals that wish to become a resident of the country, while performing most of their economic activities outside of it.
- Residency in Andorra allows individuals to legally minimize their tax while maintaining an enviably high standard of living.
- Initially, passive residence permits are given for 2 years.
- This is then renewed for another 2 years, then 3 years, then 10 years.
- After 20 years, you can apply for citizenship.
- For all types of passive residency in Andorra, a mandatory investment of €50,000 must be made into Andorra’s economy.
- For those with their own company, Andorra’s active residency program is known locally as “residència i treball per compte propi” or “compte propi” for short.
- That is, residence and self-employment.
- This type of residency has been coined “Category D” by some local agents, though that is not its official name.
- Active residence via compte propi requires:
- either renting or purchasing a property in Andorra of at least 20m²; you will need to provide a rental contract or property title upon application
- apostilled documents, dated within 3 months; depending on the current requirements (seems to change often) and your personal circumstances, however expect to provide the following:
- police certificate from your country of birth
- police certificate from your current country of residence
- birth certificate or copy of passport
- marriage certificate
- apostilled birth certificate or passport
- foreign investment approval from the government
- a meeting in person at a notary
- company incorporation
- deposit of €3000 share capital in an Andorran bank, this amount then belongs to your company
- a local trading license
- a work permit for the shareholder/s
- medical examination and interview
- registration with CASS, Andorra’s healthcare system
- a €15,000 deposit with INAF
- Those seeking residence under compte propi must own at least 11% of a local company and be a working director of that company.
|
Type of Visa/ Permit |
Documentation |
Validity |
Eligibility |
|
Passive Residence |
|
2 years (renewable) |
|
|
Active Residence (Category D) |
|
|
VALUE ADDED TAX (VAT)
- In Andorra, the VAT is the lowest anywhere in Europe, with a general rate of 4.5%.
- It is known as “I.G.I.”, short for “impost general indirecte “.
- Exceptions include:
- 1% on certain media like books, magazines and newspapers,
- 1% for food and drink (except alcohol),
- 2.5% on works of art,
- 2.5% on fees charged by tourism operators,
- 9.5% on banking and financial services charges.
- Education, healthcare and medicine are all exempt from the VAT in Andorra.
|
VAT |
|
|
Higher Rate |
9.5% |
|
Standard Rate |
4.5% |
|
Reduced Rate |
2.5% |
|
Reduced Rate |
1% |
|
Exempt |
0% |
WITHHOLDING TAX
Dividends
- No withholding applies on dividends paid to residents or nonresidents
Interest
- No withholding applies on interest paid to a resident company or to a nonresident
- Interest paid to a resident individual is subject to a 10% withholding tax
Royalties
- Royalties paid to a nonresident are subject to a 5% withholding tax
- Royalties paid to a resident individual are subject to a 10% withholding tax
- No withholding tax applies on royalties paid to a resident company
Fees for Technical Services
- Fees for technical services paid to a nonresident, or to a resident individual, for services related to business activities in Andorra are subject to a 10% withholding tax
- No withholding applies on payments to resident companies
|
Type of Payment |
Residents |
Nonresidents |
||
|
Company |
Individual |
Company |
Individual |
|
|
Dividends |
0% |
0% |
0% |
05 |
|
Interest |
0% |
10% |
0% |
0% |
|
Royalties |
0% |
10% |
5% |
5% |
|
Technical Service Fee |
0% |
10% |
10% |
10% |
TERMINATION
The contract might be terminated in the following cases:
-
- Expiration of the term or termination of the work for which employee has been agreed upon.
- Mutual agreement of the parties.
- Death or permanent disability of the person worker to carry out the work contracted.
- Death, incapacity or retirement of the employed person.
- When the worker is deprived of freedom by court.
- Declaration of bankruptcy of the employer.
- An objective need to amortize the job places due to economical, technical, organizational or other causes.
- The contract might be terminated by the employer by means of a notice communicated with terms calculated as one day per month worked up to a maximum of 90 days and with the payment of compensation.
- An employee might terminate the contract in the following cases:
-
- During the trial period, without prior notice.
- By means of a ten-day notice, if it’s been less than a year of work for the company, and ten days plus one day per every month worked, up to a maximum of thirty days, if there is more than one year of work for the company.
- Without prior notice if an accident or force majeure makes it impossible to continue to work.
- In case of retirement age, by means of the corresponding communication to the employer with a minimum of three months’ notice.
STATUTORY BENEFITS
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, maternity leave, overtime pay
- Statutory benefits also include social security benefits
|
Statutory Benefits |
|
Probationary Period |
|
Annual Leave |
|
Public Holidays |
|
Maternity Leave |
|
Overtime Pay |
|
Social Security Benefits |
PAYMENTS AND INVOICING
- The tax year is the calendar year
- Each individual must file a tax return
- Joint filing is not permitted
- The personal income tax return must be filed and tax paid between 1st April and 30th September for the year following the tax year
- Where there is no loss to tax authorities, penalties may range from EUR 150 to EUR 3000.
- Underpayment penalties range from 50% to 150% of the unpaid tax liability
