On 17 September 2026, the Andorran Government approved the Draft Budget Law for 2027, marking the most ambitious fiscal plan in the principality’s history with total expenditures and investments reaching 834 million euros. The budget bill, now forwarded to the General Council for parliamentary debate, reflects the administration’s commitment to sustaining welfare state policies while addressing structural growth challenges. The proposal incorporates targeted tax policy adjustments designed to broaden the tax base, enhance progressivity, and align with international standards including OECD BEPS 2.0 Pillar Two implementation timelines. Key fiscal measures include revised corporate income tax brackets for multinational enterprises, enhanced personal income tax allowances for middle-income households, and new environmental levies on high-emission activities. The budget also allocates significant resources to digital transformation of the tax administration, aiming to improve compliance efficiency and reduce the VAT gap through real-time reporting mandates effective 1 January 2027.
Key Takeaways
- Historic Spending Level: The 834 million euro budget represents a 12.3% increase over 2026, funded through a combination of projected revenue growth, targeted tax rate adjustments, and EU association agreement transition funds.
- Tax Base Broadening Measures: New provisions expand the corporate tax net to capture digital service revenues, introduce a minimum effective taxation regime aligned with the 15% global minimum tax, and phase out selected legacy exemptions for holding structures.
- Green Taxation & Compliance Modernization: Environmental taxes on fossil fuels and tourism-intensive sectors will generate an estimated 45 million euros annually, while mandatory e-invoicing for B2B transactions aims to cut VAT fraud by 30% within two years.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement