Duty free stores: Andorra. VAT 4.5% + no excise. Why do 8 mln Spaniards and French visit Andorra for shopping every year?
Duty free stores: Andorra. The whole country is duty free
Why do 8 million Spaniards and French visit Andorra to go shopping every year?
Today the capital of Andorra offers a huge variety of shopping facilities to its tourists.
Due to the fact that the Principality has one of the lowest VAT rates (IGI — 4.5%) in Europe, shopping in Andorra is the best inside the borders of the EU. Average prices for some food products, clothing, sporting goods, equipment, and alcohol are lower than in neighboring Spain or France by 15–20%.
Spain VAT rates start from 4% to 21% on basic products. For example, basic foodstuffs, medicines, and transport are taxed at 10%. In France there are 4 VAT rates: 18.6% is the standard rate for all goods and services; 33,33% is the marginal rate on luxury items, cars, alcohol, tobacco; and there is a 7% reduced rate on cultural goods and services; finally, 5,5% is applied to the goods and services of first necessity (food, except alcohol and chocolate; medicines, housing, transport).
In addition, in Andorra, there are no taxes on imports.
Because of more competitive prices, the trade market is one of the main economic sectors in Andorra.
In some duty‑free stores during the sales, prices can be significantly lower.
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