Andorra approves 33 companies for patent box; 11 applications denied

Since 2018, 33 companies have been authorised to use Andorra’s Patent Box regime and 11 applications have been denied, Finance Minister Ramon Lladós said in a written response to questions from General Councillor Carine Montaner. Authorities have received 44 applications in total.

Of the 11 denials, seven were rejected expressly, two expired after companies failed to pursue the procedure, and two were closed through negative administrative silence. Lladós said the two cases resolved by negative silence concerned census declarations for the 2022 and 2023 tax years; one of those files involved a company in liquidation.

The Patent Box allows an 80% reduction in the tax base for income from qualifying intangibles — such as patents, trademarks and software — provided the assets meet the regulatory requirements. The regime was introduced as part of Andorra’s alignment with OECD standards after joining the BEPS project in 2016 and was judged non‑harmful by the Forum on Harmful Tax Practices.

Montaner, of the Andorra Endavant group, has criticised the system, saying it “is not working effectively” and is marked by excessive administrative silence that generates distrust and legal uncertainty, with professionals often needing to press for responses.

Lladós defended the administration’s handling, saying applications undergo rigorous review because of the significant fiscal advantage the regime confers and that the benefit is only granted when intangibles strictly meet the criteria. He added that the government is working with Andorra Business to promote the regime and with the digital transformation department to digitise the application process and enable submissions via the government’s electronic portal.