In the Andorran economy now, the primary or agricultural sector is of minor importance and is centred on tobacco, grazing and some other traditional crops. Cattle are the mainstay of livestock farming. The most important sector nowadays, without doubt, is that of services, in the form of trade, tourism and the financial sector.
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The principal objective of the current economy is the diversification of resources. The fact that there is a reduced taxation burden on consumption means that the country is attractive for luxury goods (jewellery, furs, clothing, perfumery, etc.). Industry is insignificant, although the new strategy of economic diversification is trying to encourage the introduction of small and medium specialised businesses.
Relations with the European Union are governed by a trade agreement signed on 28 June 1990, establishing a customs union for industrial products and special arrangements with regard to agricultural products (http://www.duana.ad/).
The Andorran Chamber of Commerce, Industry and Services can supply more detailed information on the Andorran economy and more recent data on aspects such as the administration income, State budgets, GNP and the balance of trade.
Now, the Principality of Andorra has no system of direct taxation of personal income, trading profits or wealth. However, there is a tax on capital transfers inter vivos, an indirect tax on the supply of services, an indirect tax on goods affecting the production, preparation and importation of all the products found on Andorran territory, and a tax on consumption which only applies to imported agricultural products.
There are other taxes affecting the owners of a company and for entry in the Trading Companies Registry; for the exercise of trading activities and liberal professions. In Andorra there is no law imposing a tax on inheritance.
The most important local administration or commune taxes are for the supply of services such as street lighting and drinking water, for works permits, for trading and industrial activities, etc.
The Studies Service of the Ministry of Finance offers complete and updated statistical information on the most important facets of the Andorran economy.