2023 Tax Control Plan: Key Actions of the Andorran Tax Administration

Authors: Berta Bonet, Laura Lobón and Laura Palomera

On 7 June 2023, the Government of Andorra published the 2023 Tax Control Plan (TCP) in the Official Gazette of the Principality of Andorra (BOPA). This document sets out the actions that will be carried out by the tax inspection, tax management, collection and customs authorities to ensure compliance with tax obligations.

What is the Tax Control Plan?

Law 21/2014 on the Foundations of the Tax System requires the Administration to inform taxpayers of the general criteria guiding tax control activities. To this end, a Tax Control Plan is approved every year, defining the priorities for tax supervision and verification.

Its purpose is to prevent and correct tax fraud while strengthening legal certainty and transparency within the Andorran tax system.

Key Actions Planned for 2023

Tax Inspections

Regarding the General Indirect Tax (IGI), the Tax Administration will pay particular attention to deductions related to real estate acquisitions, taxpayers applying the reduced 1% rate and claiming recurring refunds, as well as the detection of undeclared economic activities.

With respect to Non-Resident Income Tax (IRNR), special attention will be paid to royalty payments made to foreign suppliers and real estate income obtained in Andorra by non-resident individuals or entities.

As for Corporate Income Tax (IS), inspections will focus on directors’ remuneration, declared payroll expenses, depreciation, international double taxation relief, investments benefiting from tax incentives, and the correct application of special tax regimes.

In the area of Personal Income Tax (IRPF), control activities will focus on income derived from economic activities and real estate capital, particularly among taxpayers considered to present a higher compliance risk.

Tax Management

Tax management activities will strengthen controls relating to the Tourist Accommodation Tax, the Empty Property Tax and IGI returns.

Particular attention will also be given to significant refund claims, the correct filing of tax returns, taxpayer registration obligations and requests for the reimbursement of undue payments.

Tax Collection

The Plan includes the assessment of enforcement surcharges, the implementation of automated bank account garnishments for debts subject to enforcement proceedings, and enhanced controls over tax offsets and refunds involving taxpayers with outstanding liabilities.

Customs Controls

The Customs Department will continue carrying out control activities both when goods enter the country and through subsequent verification procedures provided for by law.

Conclusion

The 2023 Tax Control Plan confirms the Andorran Tax Administration’s commitment to strengthening oversight in areas considered to present a higher tax risk. Companies, professionals and individuals should regularly review their tax compliance to minimise the risk of issues arising during future audits and inspections.