Andorra has a very balanced tax system that allows its residents to enjoy a life without major financial worries. However, regardless of whether you are a large or small company, it is important to know the deadlines to know when to do the accounting closing and pay the corresponding taxes. Below, we explain everything you need to know about this subject and about Andorra’s tax calendar.
What is the accounting closing of a company?
The closing of a company’s accounts is an essential procedure in the financial field. It involves closing the income statement, including revenues, expenses, cost of sales and production costs.
Once this phase has been carried out, these figures are transferred to the corresponding balance sheet accounts. This process is a fundamental means of evaluating the economic result of a company in a specific period or in its entirety, allowing the precise quantification of the profits or losses recorded.
How is the accounting closing of a company done?
Closing the income statement requires the execution of adjustments, which include aspects such as depreciation of fixed assets and amortization of intangible assets, together with bank account reconciliations. However, we show you step by step how it is done.
- Perform a year-end balance sheet to verify the reconciliation of amounts and balances. Any errors identified should be corrected before proceeding, especially when using computer software.
- Thoroughly examines each general ledger tab to ensure the accuracy of the accounting, avoiding omissions such as failure to open an account or errors in the values entered.
- Executes adjustments to accounts that may affect accounting profit, such as inventories, provisions, impairment of assets and other derivative adjustments.
- Determines the pre-tax result after completing the adjustments. To obtain the tax result, it is necessary to make additional adjustments established by the Andorran corporate income tax law.
This process can be a bit suffocating if you are not used to dealing with bureaucratic tax issues. We advise you to put yourself in the hands of MCA Assessors where we have a team of expert advisors who will help you with all your tax process.
Andorra Tax Calendar
So that you can have a mental outline of how taxation is organized in Andorra, we show you a summary of the Andorran calendar. It will help you to have a general guide, although we advise you to contact our team of professional advisors at MCA Assessors so that we can manage your needs in a personalized way.
January
Companies must do the accounting closing before June 30 of each year. Tax formalities such as audit reports, application for the objective determination regime and liquidation of taxes such as IRPF, ISI Insurance, IEAT, IRNR and IGI, among others, are initiated.
February
The monthly liquidation of the IGI is carried out. There are voluntary payment deadlines for property tax in Encamp, rental income in Encamp and Ordino, and the establishment of activities in Escaldes-Engordany.
March
The monthly settlement of IGI and ISI Insurance is carried out. In addition, there are voluntary payment periods for rental income and the establishment of activities in Escaldes-Engordany.
April
The voluntary period for payment of the tax on the registration of economic activities begins. In addition, the period for filing annual accounts of individuals with annual income over 150,000 euros begins.
May
Monthly IGI liquidation is executed. Several municipalities have voluntary payment periods for property tax, rental income and business location.
June
Until the end of June, the voluntary period for the payment of the economic activities tax is extended. This is also the deadline for preparing and signing the annual accounts for the previous year.
July
During July, the deposit of annual accounts and the settlement of IRNR for permanent establishments are carried out. The monthly settlement of IGI and other taxes such as corporate income tax, withholdings and income on account is also carried out.
August
The monthly settlement of the IGI is carried out. In addition, it is the second due date for the tax of establishment of activities in Escaldes-Engordany.
September
The deadline for the declaration and liquidation of income from economic activities ends. There are also deadlines for IRNR, corporate income tax, IGI and ISI Insurance, among others.
October
The monthly settlement of the IGI is carried out. There are deadlines for the IRNR, the IGI, the IRPF, the tax on gaming activities, the IEAT and the settlement of activities.
November
The monthly settlement of the IGI is executed. The voluntary period for the tax on the establishment of activities in Andorra la Vella ends.
December
The monthly liquidation of the IGI is made. The deadlines to apply for the simplified special regime and to be considered a businessman or professional in the following year end. The deadline to apply for the objective determination regime for the following year also closes.
In conclusion, the accounting closing and tax responsibilities of companies can be a bit overwhelming for those starting out in the business world. However, at MCA Assessors we have a professional team of advisors and managers who will help you resolve any doubts and process your taxation in Andorra smoothly.
