Andorra will also send the financial information of bank account holders

Andorra signed the agreement on financial transparency (based on the OECD AEoI) with the European Union. The aim of the accord is to prevent clearly the citizens of the EU member states to hide their wealth in the city-state. The agreement will enter into force in 2018, from that time Andorra shares the financial information and due to the reciprocity, it will receive the financial data of their residents from the EU member states. The collection of financial data by Andorran financial institutions will begin in 2017.

Thus, the union will gain access to the names, addresses and other personal data, such as date of birth of the bank account holders in Andorran banks. Also, they share information on account balances and certain types of income (e.g., dividends, interests and capital gains).

The agreement was ratified by the EU’s Commissioner for Economic and Financial Affairs, Pierre Moscovici, the President of the Eurogroup and Dutch Minister of Finance, Jeroen Dijsselbloem, and Andorra’s Finance Minister, Jordi Cinca.

Moscovici told reporters, that transparency is one of the most important tools of “fair” taxation because it ensures that “all governments have access to fairly earned income and citizens, and the companies will also pay a proportionately bear their burdens”. In 2015, the European Union concluded similar agreements with Liechtenstein, San Marino, Switzerland and with Monaco as well in February 2016.

Andorra is not a member of the European Union and they do not force to join the community. The country enjoys the Customs Union, but doesn’t want to be part of the Schengen zone. The 6th smallest European country’s political system is more than special because it is the only state in the world, whose leaders are elected from other nations. Under this traditional custom from the historic times, two co-princes govern Andorra, the ruler of France and the Bishop of Urgell. The current co-princes are Francois Hollande French president and Bishop Joan Enric Vives Sicília.

Andorra is a famous European jurisdiction for tax planning. Due to the increasingly stringent international environmental, Andorra also made it easier for foreigners to obtain the tax residency. From the four tax-residency program options, the most attractive and most modern solution is the “category C”. Under this scheme, internationally recognized scientists, artists and athletes can move to the beautiful mountainous country and in addition they don’t have to pay taxes. Of course, entrepreneurs can also move to Andorra in exchange for a larger sum of investment. Necessary amount of investment in their cases depend on the immigration category, it can be the purchase of governmental bonds of 40 or 50 thousand euros, but an EUR 400,000 mandatory investment also can be part of the process.