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The Andorran General Council has adopted draft legislation providing for the introduction of a tax on individual income (IRPF) in Andorra from January 1, 2015.
The IRPF tax will be levied at a flat rate of ten percent on global income exceeding EUR40,000 (USD55,000). A concessionary five percent rate applies for earnings between EUR24,001 and EUR40,000. Meanwhile, tax relief will also be accorded through the law for families, for incapacity, and for the acquisition of a primary residence, and a tax-free threshold of EUR3,000 will be introduced for interest income.
Andorran Finance Minister Jordi Cinca told lawmakers that the new law will help to diversify the nation's economy and to ensure fiscal stability, while at the same time enabling the signing of double taxation agreements. He said these would be key to the territory's economic growth in the years to come.
The Government dismissed proposals for a more progressive tax structure from the parliamentary group chairman of the Opposition Social Democrat (PS) party, David Rios, for a higher tax-free allowance of EUR30,000, and a 20 percent income tax rate for those earning more than ten times the minimum wage.
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