Andorra, the small country of the Pyrenees, has been a traditional refuge for great Spanish fortunes that feel asphyxiated by the treasury. Artists (Montserrat Caballé), celebrities (Tita Cervera), tennis players (Arantxa Sánchez Vicario) or motorcyclists (Jorge Lorenzo) moved their residence there to pay less taxes. With few exceptions, they did it with absolute discretion. Some actually lived there most of the year; but others do not, and the Tax Agency was there to find out.
The Treasury already has under the magnifying glass the new batch of tax exiles: the youtubers. Unlike that generation that, without making noise, tried to safeguard the fruit of their careers, the youtubers they do not hide. They shamelessly justify their decision to go to Andorra and show the chalets they buy or rent. In recent years, at least five of the ten with the most audience on that platform have gone to live in the mountains of a country close to Catalonia and three hours by car from Barcelona.
The last one was Rubén Doblas, known as El Rubius, the Spaniard with the most subscribers on YouTube (39.5 million). It was an announced departure. In a live video with his followers, he bitterly expressed his complaints while playing: “The Treasury has tried to screw me for being the only fool who has stayed in Spain (…). If the government builds a hospital called Rubén Doblas, I still forgive them and stay here. ” But finally El Rubius has left, and his departure has fueled a controversy that slides between the ethical and the legal and has also unleashed a small war between digital content creators.
The border crossing of these nouveau riche worries the Treasury due to the loss of income for the treasury, but also because of the message it leaves to a legion of very young followers. David Cánovas, alias TheGrefg —became the record for live viewers in Twich to talk about the Fortnite game—, was resounding: “This is a clash between morality and legality, but donating half of what I earn because ‘I love my country’ … I don’t see it, ”he said in 2018, in an interview with El Mundo. “There is a brutal nature and skiing is the cock (…). Andorra is youtuberland”; he added, laughing, in an appearance on the program La Resistencia. Through his representative, he says now that he does not want to talk more about the subject.
“They use Spanish services, they should not demonize taxes, essential for the welfare state,” laments Carlos Cruzado, president of the Union of Technicians of the Ministry of Finance (Gestha). “If what these guys say about taxes is just that they pay too much, it is not the best pedagogy,” says the deputy director of territorial inspection, Azucena Hórreo, to EL PAÍS. At least since 2011, the Tax Agency prioritizes “the control of transfers of residence of large assets to other countries,” he adds. Sources from this body confirm that inspections are being carried out to verify whether the tax residence of the influencers in Andorra it is real – which means they live there at least 183 days a year – or just a cover to pay less.
The inquiries, for now only administratively, include the analysis of travel, consumption and credit cards. Is not easy. The youtubers they should not travel to give concerts or run MotoGP races: they work from home, in front of the computer. “Digital is a challenge, due to the difficulty of control. But also an opportunity, because their business is based on exposing themselves and showing their lives ”, they add.
Houses and cars
Josep Garcia, head of Advantia, one of the almost 500 companies in Andorra that advises not only on youtubers, but to all kinds of professionals who have settled there. They do not all live in the same parish (there are seven in Andorra), but they are related to each other and see each other often. “A breeding ground has been created between youtubers and e-commerce people who set up businesses together ”.
Samuel de Luque (Vegetta777, second in the ranking of youtubers Spaniards with 32 million subscribers) and Guillermo Díaz (Willyrex, fifth place) were the pioneers. “I wouldn’t mind being in Spain if they told me to pay 15%. But almost 50 … I do not know how long I will be able to continue living on YouTube ”, argued Vegetta777. In Andorra, Garcia explains, the maximum rate for personal income tax is 10% (compared to 47% in Spain), while corporate tax is 10% (compared to 25% in Spain); all this, in general terms.
To qualify for active residence – to work – you must have a rental or purchase address, invest 15,000 euros, manage a company (that’s how most of the youtubers) and live in Andorra for at least six months. Sources from the world of finance in that country – which a decade ago ceased to be considered a tax haven – assure that young people comply. “They live in big houses, sometimes with friends. They do not go unnoticed. They have a very high level of spending. They are users of high-end cars, with whom they sometimes race. They decorate them with vinyls and personalized license plates, it is easy to recognize them ”, they affirm. Although they admit that their objective is to save taxes, these sources indicate that they enjoy other attractions: skiing, nature, safety …
The Andorran Government is delighted with its presence, for what it contributes to the economy. The country’s police verify that the residence is effective by interviewing the neighbors and, if there are doubts, analyzing the utility bills. But the Tax Agency verifies it, equally, by its own means.
The microstate that ceased to be a tax haven
Andorra left the Spanish list of tax havens years ago. In 2011, the Principality signed a tax information exchange agreement with Madrid, and in 2015, a double taxation agreement. The OECD removed it in 2012 from its blacklist; in 2018 the EU stopped considering Andorra as a territory with a pernicious tax regime. “There is no single list of tax havens, each institution has its own”, clarifies José María Peláez, State Treasury Inspector.
In the Spanish case, there are 32 territories considered tax havens. Since 1991, 15 countries have been emerging, including Andorra and Singapore. Spanish law in force establishes that for a jurisdiction to be considered a tax haven, it must have zero or very low taxation and an absence of information exchange. This regulation, however, is going to change: the Government is processing a new law against fraud, which will bring the criteria closer to those applied by international institutions and will introduce the concept of harmful tax regimes. “Everything may be assimilated to the EU [12 países en la lista negra], or that the list of Spain is tougher, ”says Peláez.
Although Andorra is no longer considered a tax haven, its very low taxes compared to neighboring countries continue to be attractive to the wealthiest. According to the independent Tax Justice Network, the Principality subtracts more than 15 million euros each year from the public coffers of other countries due to tax avoidance of large fortunes.
If a Spanish taxpayer moves to a territory considered tax haven, he must continue to pay taxes in Spain for the following four years. In all other cases, Andorra included, this clause does not apply. But it is not so easy to stop being a tax resident in Spain. Not only are taxpayers required to live de facto in another country for more than half the year; The Treasury also takes into account where the center of vital and economic interests of the interested party is – companies, assets, accounts, family relationships.
“All the celebrities who have had problems with countries like Andorra, Monaco or Switzerland have been because the transfer was fictitious, and they have left traces that showed that they continued to reside in Spain,” says Peláez. “The case of youtubers It is a novelty: tax systems are not designed for digital activities. If they really leave, it can be said that they are unsupportive, but they do not commit fraud ”.