Andorra clarifies new VAT rates

Andorra introduced a full EU-style VAT regime from the 1 January 2013. This included the new tax at 4.5%, replacing the old sales tax.

It has recently clarified the supplies subject to the higher, 9.5% VAT rate. Most of these are financial services, which are generally exempt in European Union member countries.

The following supplies are subject to VAT of only 1%:

• Basic foods
• Newspapers and journals
• Water

The following supplies are to be charged at 0%:

Public health and medicines

• Education
• Housing and rental
• Cultural and sporting event admission