Law 19/2016 of 30 November on the automatic exchange of information in tax matters was passed by the General Council of Andorra and came into force on January 1, 2017. This law implements the OECD’s Common Reporting Standard (CRS) for the automatic exchange of financial account information to improve international tax compliance.

Key aspects of Law 19/2016 include:

1. It regulates the automatic exchange of financial account information between Andorra and other states with applicable international agreements.
2. The law applies to two main frameworks:
   a) The Agreement between the European Union and Andorra on automatic exchange of financial account information.
   b) Other international agreements that implement the OECD’s Common Reporting Standard.
3. Andorran reporting financial institutions are required to report information on financial accounts held by foreign tax residents.
4. The law includes provisions for confidentiality, data protection, and limitations on the use of exchanged information.
5. It incorporates two annexes that detail the OECD standard and complementary standards for communication and due diligence of financial account information.

Law 19/2016 has been amended by Law 30/2017, which expanded the list of jurisdictions with which Andorra exchanges information automatically. This legislation has positioned Andorra as a participant in global efforts to combat tax evasion and promote tax compliance through international cooperation.

While distinct, both Law 19/2016 and CbC reporting contribute to Andorra’s compliance with international tax transparency standards and its participation in the global effort to combat tax evasion.

Both are part of broader OECD initiatives to combat tax evasion and promote transparency, but Law 19/2016 implements the Common Reporting Standard (CRS) in Andorra, focusing on the automatic exchange of financial account information.

Key differences and relationships with CbC

1. Scope:
   • Law 19/2016: Applies to financial institutions reporting on individual and entity accounts.
   • CbC reporting: Applies to large MNEs reporting on their global operations.
2. Implementation in Andorra:
   • Law 19/2016: Implemented in 2016, with first exchanges in 2018.
   • CbC reporting: Introduced for fiscal years commencing on or after January 1, 2018.
3. Threshold:
   • Law 19/2016: No specific threshold for reporting financial accounts.
   • CbC reporting: Applies to MNE groups with consolidated revenue of EUR 750 million or more.
4. Reporting requirements:
   • Law 19/2016: Focuses on financial account information of non-residents.
   • CbC reporting: Requires reporting on income, taxes paid, and economic activities of MNE groups in each tax jurisdiction.