Andorra introduces VAT at 4.5% in 2013
Andorra has replaced its Sales Tax regime with a full Value Added Tax system from 1 January 2013.
The Sales Tax was levied at 4% on most consumer spend. The new VAT will be more wide ranging, with limited exemptions. For example, insurance cover will be liable to VAT. A number of financial services will be zero rated (e.g. banking and credit), which means no VAT on sales, and suppliers may recover input VAT suffered on their supplies.
There will also be an opportunity for foreign EU individuals and companies to recover any Andorran VAT incurred. Non-EU companies will be able to do the same, subject to reciprocity agreements between Andorra and their home state.