Spain has announced new tax avoidance measures after popular Youtube stars boasted about moving their residency to Andorra to pay less tax to the state.
Andorra has lower tax rates than its larger neighbors, France and Spain.
Andorra has a population of 77,000 is located in the high mountains of the Pyrenees between France and Spain.
Tourism accounts for about 80% of GDP in Andorra. Before the pandemic an estimated 10 million people visited each year, drawn by winter sports, a warm summer climate, and duty-free goods.
Spain’s tax agency has pledged to start using “big data” to search for people who revealed they had moved abroad for tax purposes.
As part of a push to harness more varied data, the tax agency will search through as many as 70 different sources, including records from other taxpayers, to highlight a few suspected fraudsters, a source with the agency said. The tax agency did not say what had motivated its clampdown.
Public backlash in Spain increased after Rubén Doblas, who posts YouTube videos under the name El Rubius, announced that he was joining the exodus to Andorra, stirring a debate in the Spanish media about where digital high-earners should pay their taxes.
Other Spanish YouTube personalities such as TheGrefg, Vegetta777, and Patry Jordán have also settled in Andorra.
Doblas has the world’s 44th most popular YouTube channel with 3.9 million subscribers and an estimated annual income of up to $2.3 million, according to social media tracker SocialBlade. He defended his right to choose where to live and criticized Spanish tax authorities as out of touch.
Doblas said on Twitter: “I have been a Youtuber for the last 10 years paying almost half of what I have earned in taxes in Spain. The tax laws were not prepared for this new wave of online creators in Spain. And they still aren’t. They have not updated their catalog of professions since 1990.”
In Spain, anyone who earns above 300,000 euros per year must pay income tax of 47%, compared with a 10% flat rate charged by Andorra on earnings of more than 40,000 euros.
Andorra’s banking sector enjoys partial tax-haven status.
Andorra is not a member of the EU, but enjoys a special relationship with it and uses the euro.