Taxation in Andorra

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One of the world’s most lenient tax havens, the principality of Andorra, announced in June that it would collect its first income tax in 2016.

Andorra is to introduce a tax on personal income for the first time. The principality is under pressure from its neighbours to tackle tax evasion.

Citizens of this tiny, snow-capped mountain state squeezed between Spain and France are looking forward with apprehension to a new year’s revolution that will see Andorrans learn what it is like to pay direct taxes.

The principality of Andorra, long out of reach for European and international tax authorities, announced on Monday that it would vote on legislation to introduce a range of taxes on people, products and corporations as early as 2012.

Andorra, one of Europe’s smallest nations, has relied on banking secrecy, tourism and duty-free trade to turn itself into one of the Continent’s most impressive postwar economic success stories.