How to Apply the Tax Deduction for Job Creation in Andorra
Optimizing the tax bill is a priority for any company or self-employed professional in the Principality. One of the most powerful tools to achieve this is the tax deduction for job creation in Andorra.
The Government of Andorra has published a recent technical communique dated March 25, 2026, which establishes strict and definitive criteria on how to calculate this deduction. In this article, we break down the regulatory keys to maximize your savings with full legal certainty.
Who benefits from this tax deduction?
This tax incentive is designed to reward business growth in the country and is applicable to:
- ✓ Legal entities: Subject to Corporate Tax (IS).
- ✓ Self-employed workers: Individuals paying Personal Income Tax (IRPF) under the business activities regime.
What does the new 2026 technical communique clarify?
The Tax Administration has defined three fundamental pillars to avoid errors in the application of the deduction:
1. Real increase in headcount
Hiring alone is not enough; there must be an average increase in the annual permanent staff compared to the previous year. If new hires only cover previous departures, the right to the deduction is not generated.
2. Admitted contract types
To compute this increase, only indefinite or fixed-discontinuous contracts formalized in Andorra are accepted. Temporary contracts are totally excluded from this calculation.
3. Calculation based on 1,800 hours
The Government unifies the calculation criteria using equivalent units based on 1,800 annual hours. This implies that:
- ✓ A full-time day (1,800h) counts as 1 unit.
- ✓ Part-time days or mid-year hires count proportionally to the hours worked.
- ✓ Overtime hours never allow exceeding 1 unit per worker.
Deduction amounts: Which hires yield more?
- ✓ €1,000 per person for staff increase in the general type.
- ✓ €3,500 per worker if they belong to vulnerable groups (under 25, over 55, or persons with recognized disabilities).
⚠️ Maintenance requirement: Regulations require that the average staff increase must be maintained during the year following the close of the exercise in which it is applied.
Check-list: Required Documentation
- ✓ Copy of the formalized contract (Indefinite or Fixed-Discontinuous).
- ✓ Exact registration and cancellation dates at the CASS.
- ✓ Calculation of the effective annual hours.
- ✓ Certificate of registration at the Employment Service prior to hiring.
- ✓ Official accreditation for special groups (age or disability).
Do you want to secure your tax savings?
At Triple A, we are experts in Andorran taxation. We help you audit your new hires and precisely calculate your average headcount to apply all deductions safely.
