Measures to improve the purchasing power of citizenship
On June 22, 2022, Law 17/2022, dated June 9, 2022, on measures to improve the purchasing power of the citizens was published in the Official Gazette of the Principality of Andorra (BOPA), with number 76, Law 17/2022, dated June 9, 2022.
Due to the SARS-CoV-2 pandemic, there has been an impoverishment of the economic sectors, which has been reflected in the economic capacity of the population. In addition, currently with the conflict in Ukraine, we are experiencing its impact on global markets with significant economic and social effects that are driving a rise in inflation and a fall in the purchasing power of households.
As a result of this situation, our government has been forced to establish certain financial and social measures to contribute to improve the purchasing power of citizens.
This law of measures to improve the purchasing power of the citizenship contemplates four articles and five final provisions:
- The first article refers to the revaluation of the lowest salaries. As from June 1, 2022, all employers are obliged to increase by at least 3.3% the salary of workers who receive a gross fixed salary which, on an annual basis and for the ordinary legal working day, is less than €27,130.44. The obligation is not applicable in the case of workers’ salaries that have been increased by this percentage or by a higher one in the last twelve months or that correspond to new hires made in the twelve-month period prior to the entry into force of this law.
- The second article refers to an increase in the pensions of the “Caixa Andorrana de Seguretat Social” (CASS) of a gross amount lower than the minimum interprofessional salary. As from June 1, 2022, an increase of 3.67% has been agreed in the contributory pensions for retirement, widowhood and disability derived from non-occupational accident or common illness, and in the disability, pension derived from occupational accident or occupational illness for people who receive a pension with a monthly amount lower than the minimum interprofessional salary of the CASS, and who have accredited a minimum contribution period of 25 years.
For the first accounting year ending on or after December 31, 2021, the obligation to include comparative information corresponding to the previous year is not applicable to entrepreneurs using the reporting models approved by the ministerial order of March 30, 2022.
Regarding the final provisions, the first one provides for the modification of the direct tax rate applied to certain feminine hygiene and baby care products. Sanitary towels and tampons, diapers and similar articles of any material are now taxed at a reduced rate.
The second final provision is the amendment of Law 21/2018, of September 13, on the promotion of energy transition and climate change (Litecc). It modifies the definition of the modalities of self-consumption and eliminates the limitation imposed regarding the need to produce the electric energy in the same place of consumption, empowering the Government to develop by regulation the figure of the producer-consumer, the territorial scope in which this self-consumption is allowed and the necessary aspects for the effective application of the measure. The role of the distribution and transport networks in the transit of electrical energy within the framework of self-consumption is recognized.
The third final provision modifies the additional provision of Law 30/2007, of December 20, 2007, on the accounting of entrepreneurs. The obligation of the deposit of accounts by entrepreneurs, other than public limited companies or limited liability companies, with an annual total income of less than 150,000 euros, is applicable for fiscal years beginning on or after January 1, 2023.
The fourth final provision instructs the Government to prepare, within a maximum period of three months, the proposal for the modification of the tax on empty dwellings, with the aim of increasing efficiency and with the forecast that the collection of the tax will be considered as a finalist collection, associated with the promotion of socially protected or affordable housing.
The fifth final provision is the entry into force of the Law, the day after it is published in the BOPA, except for the first final provision which enters into force on July 1, 2022.
Beth De Sa
Augé Legal & Fiscal