Andorra, in alignment with its commitment to the OECD’s Base Erosion and Profit Shifting (BEPS) framework, has implemented Country-by-Country Reporting (CbCR) as part of its international tax transparency obligations. The Andorran tax authorities, governed by the Ministry of Finance, are responsible for overseeing compliance with these requirements under BEPS Action 13.

This guide provides a detailed overview for CFOs and tax professionals of multinational enterprises (MNEs) operating in Andorra, highlighting applicability, reporting requirements, filing deadlines, penalties, and additional resources to ensure compliance.

Applicability of CbCR in Andorra

Criteria for Reporting:
CbCR obligations in Andorra apply to MNE groups that:

• Have consolidated group revenues exceeding €750 million in the preceding fiscal year.
• Include entities or permanent establishments located in Andorra.

Local Filing Requirements:
A constituent entity in Andorra may need to file a CbC report if:

• It is the Ultimate Parent Entity (UPE) of the group, or
• It is designated as the Surrogate Parent Entity (SPE), or
• The UPE is located in a jurisdiction that does not require CbCR or does not have an effective information exchange agreement with Andorra.

Relevant Legislation:
CbCR in Andorra is governed under Law 19/2016 of Automatic Exchange of Information on Tax Matters, incorporating the OECD’s BEPS Action 13 guidelines.

Reporting Requirements

Content of the CbC Report:
The CbC report must include financial and tax-related information for all jurisdictions where the MNE operates, including:

• Total revenues (segregated into related and unrelated party transactions),
• Profit or loss before income tax,
• Income tax paid and accrued,
• Stated capital and retained earnings,
• Number of employees,
• Tangible assets (excluding cash).

Notification Obligation:

• All constituent entities operating in Andorra must notify the Andorran tax authorities regarding the identity and jurisdiction of the reporting entity for their group.

Submission Platform:

• Reports must be submitted electronically via the Andorran tax authority’s online platform, using the OECD-prescribed XML schema.

Resource:
More information can be found on the Andorran Ministry of Finance’s website: Andorra Ministry of Finance.

Filing Deadlines

• CbC Reports: Must be filed within 12 months after the end of the MNE’s fiscal year.
  • Example: For a fiscal year ending 31 December 2023, the CbC report must be submitted by 31 December 2024.
• Notification regarding the reporting entity must be provided no later than the last day of the fiscal year.

Penalties for Non-Compliance

Penalties:
Non-compliance with CbCR regulations in Andorra may result in:

• Financial penalties for late or inaccurate submissions.
• Increased scrutiny and audits by the Andorran tax authorities.

Mitigation:
Taxpayers can apply for a reduction or waiver of penalties if they can demonstrate reasonable cause for non-compliance.

Confidentiality and Information Exchange

Data Protection:

• Andorra ensures strict confidentiality of CbC reports, using the information solely for tax risk assessment purposes.
• Data is shared only with jurisdictions that have a valid and operational tax information exchange agreement with Andorra.