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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Andorra Phase 2 Report

This report for Andorra has been published on 4 Aug 2014. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place.   There is no obligation requiring identification of beneficiaries with less than a 25% interest in those foreign trusts which have Andorran trustees or which are administered in Andorra. The materiality of this gap is nonetheless very limited as the AML supervisory authorities have never come across a person in Andorra providing fiduciary services, and, during the period under review, Andorra received no EOI requests for information on foreign trusts.  Andorra should establish clear provisions in its laws to ensure availability of information on all beneficiaries of foreign trusts which are administered in Andorra or have an Andorran trustee. 
Phase 2 Rating Factors Recommendations
Largely Compliant.  Although companies are required to register ownership information with the Companies Register, the penalties to enforce these obligations have only recently been put in place. While some oversight is inherent in Andorra’s legal framework, particularly given the role of notaries, the absence of penalties in the past means that there has been no coherent, systematic oversight of the obligations to maintain information.  Andorra should ensure that its oversight of obligations to maintain ownership information is coherent, systematic and adequate and should monitor the enforcement of the new penalties 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Andorran legislation does not ensure that reliable accounting records or underlying documentation are kept for foreign trusts with an Andorran-resident administrator or trustee. The materiality of this gap is nonetheless very limited as the AML supervisory authorities have never come across a person in Andorra providing fiduciary services, and, during the period under review, Andorra received no EOI requests for information on foreign trusts.  All administrators and trustees of foreign trusts should be required to maintain reliable accounting records for the trusts including underlying documentation. These records should be kept for a minimum of 5 years. 
Phase 2 Rating Factors Recommendations
Largely Compliant.  The Companies Register oversees and enforces the availability of accounting information through the submission of annual accounts, which however do not include underlying documentation. As such, there is no system of oversight to ensure that underlying documentation is kept by all companies. In addition, annual accounts are submitted to the authorities in a simplified form in a number of cases.   Andorra should implement a system of oversight to ensure that all relevant entities in practice keep full accounting records, including underlying documentation.  
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   While the competent authority can obtain information on the ownership of relevant entities from other government authorities, Andorran legislation does not provide the competent authority with powers to access ownership information held by third parties or by the entities themselves, except from banks and other financial institutions.   The competent authority should be granted the well- defined powers to obtain all relevant information in the possession or control of all persons within Andorra’s territorial jurisdiction for the purpose of exchange of information. 
Phase 2 Rating Factors Recommendations
Partially Compliant.  With respect to joint bank accounts, the law requires that the information provided will be that related to the person who is the subject of the request only, and each account holder is considered to have an equal interest in the account unless otherwise indicated. It is unclear how Andorra would determine which information from joint bank accounts would be relevant for the requesting partner and which information would not. Andorra has no experience in exchanging information relating to joint bank accounts.   Andorra should monitor the ability of the competent authority to obtain and provide information from joint bank accounts so that it does not prevent effective exchange of information. 
During the period under review, the competent authority did not use its access powers to obtain accounting information from companies or other persons.  Andorra should ensure that the competent authority fully exercises its access powers when necessary. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   To require in all cases that prior notification be given to the affected parties of the international request for information may unduly prevent or delay the effective exchange of information in urgent cases.  It is recommended that certain exceptions from prior notification be permitted, e.g. in cases in which the information requested is of a very urgent nature or the notification is likely to undermine the chance of the success of the investigation conducted by the requesting jurisdiction. 
Phase 2 Rating Factors Recommendations
Partially Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Andorra’s arrangements providing for international exchange of information have not been given full effect through domestic law as there are some limitations on the authorities’ powers to obtain necessary information for the purpose of international information exchange. In addition, two TIEAs cannot be fully implemented due to a provision in Andorran legislation which restricts the ability of the competent authority to obtain and exchange information related to tax years beginning before the date of signature of an EOI arrangement.  Andorra should ensure that its domestic laws allow for effective exchange of information. 
Phase 2 Rating Factors Recommendations
Largely Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     Andorra should continue to develop its EOI network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   After notification, the person under investigation and the information-holder can inspect the file containing all information obtained from the requesting jurisdiction, including the EOI request.  Andorra should ensure that it discloses only the minimum information necessary to collect the requested information. 
Phase 2 Rating Factors Recommendations
Partially Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Partially Compliant.  While progress has been made on the structuring and staffing of the EOI Unit over the last years, the timeframe for answering EOI requests was generally slow.   Andorra should monitor its timeframe for answering requests to ensure that it is always able to reply in a timely manner. 
During the period under review, there has been some communication problems, where the status of the EOI request was not communicated, or EOI requests were rejected without seeking more information.   Andorra should ensure that the competent authority communicates effectively with all its treaty partners, including the provision of status updates within 90 days in all cases.