Corporate income tax in Andorra

What is the corporate income tax rate in Andorra?

The general rate of corporate income tax, created by Llei 95/2010 of 29 December 2010, is 10% of taxable profit. Collective investment undertakings governed by Andorran law are taxed at 0%, with the exception of their management companies.

A foreign company operating in Andorra through a permanent establishment is taxed at the same rate of 10%, under non-resident income tax. To compare with the French rate and the other taxes, see our comparison Andorra vs France taxes.

A minimum tax since 2024: 30% of gross tax (≈ 3%)

Since 2024, the tax finally payable, the “quota de liquidació”, cannot be less than 30% of gross tax. This floor, introduced by the reform of direct taxation (Llei 5/2023), is calculated on the positive profit, before losses from previous financial years are offset.

On our reading of the law, the floor applies to the deductions made from the tax; the reduction granted to income from patents and software comes into play earlier, on the tax base itself. Have a professional confirm the combined effect of the two mechanisms if your company uses them.

The regime for patents and software

Only one reduced regime remains. Income from the exploitation of patents, utility models and copyright-protected software benefits from an 80% reduction in its taxable base (Article 23). The tax on this income therefore comes to about 2% (indicative calculation: 10% applied to 20% of the base).

• The assets covered are exhaustively listed: patents, utility models and copyright-protected software.
• The regime requires prior authorisation from the ministry responsible for finance, which decides within six months.
• It was amended in 2018 and follows the so-called “nexus” approach defined by the OECD for intellectual property regimes.
• It applies only to this specific income, not to the whole profit of a services or trading company.

Which deductions can be applied?

The law provides for several deductions from the tax, all subject to the floor of 30% of gross tax:

Article 44 of Llei 95/2010 for employment and digitalisation.

There is no general reduced rate for young businesses or start-ups: a new company pays 10%, like the others.

The former regimes, abolished in 2018

Until 2018, corporate income tax included special regimes that greatly reduced the taxation of certain activities: international trade, intra-group financial management and investment, exploitation of intangible assets in its former version, and the holding of equity interests. Llei 6/2018 of 19 April 2018 abolished or reformed them, with a transitional period reserved for entities that were already benefiting from them.

This transition ended on 31 December 2020, after the advantage had been reduced in stages. The reform also enabled Andorra to come off Annex II of the European Union’s list in December 2018, where it had been listed since December 2017. The details are in our guide Andorra, a tax haven?

Dividends, capital, CASS: what the shareholder of an Andorran company pays

Two forms dominate: the private limited company (SL), with minimum capital of €3,000, and the public limited company (SA), with €60,000. A foreign shareholder needs a foreign investment authorisation, and the authorities expect genuine activity on the ground: see our guide to setting up a company in Andorra.

• Dividends: paid to a shareholder who is an Andorran tax resident, they are exempt from income tax; paid to a non-resident, they are exempt from non-resident income tax. A shareholder resident in France is taxed in France, under French rules. See taxation of dividends in Andorra.
• Contributions: for a director who contributes as a self-employed person, the obligation starts 30 days after the company is entered in the Companies Register. See the scale of CASS contributions.
• IGI: the company charges IGI to its customers, in principle 4.5%, and pays it over to the tax authority. See our guide VAT in Andorra (IGI).
• Residency: setting up a company gives no right of residence. Self-employed residency requires, among other things, more than 34% of the capital, effective management and a non-refundable payment of €50,000 to the AFA: see active (self-employed) residency.

Dividends received by an Andorran company. Those it receives from its subsidiaries, Andorran or foreign, and capital gains on the sale of those shares can be exempt from corporate income tax if the holding is at least 5% and has been held without interruption for one year; a foreign subsidiary must also be subject to a comparable tax on profits (Article 20 of Llei 95/2010). This regime is detailed in our guide holding company in Andorra.

The deadlines for filing and paying the tax, as well as the accounts to be kept, are presented in our guide accounting and obligations of an Andorran company.

Which status suits you?

Four questions to identify the residency status to look into, and its conditions.

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Example: €100,000 of distributed profit, in Andorra and in France

For €100,000 of profit distributed in full, the total tax is €10,000 with an Andorran company and a shareholder resident in Andorra, compared with €45,635 with a French company eligible for the reduced rate and a shareholder resident in France. If the shareholder of an Andorran company remains resident in France, the dividend is taxed in France and the total burden rises to €38,260:

Indicative calculation, with no deductions or director’s remuneration, excluding social security contributions, rounded to the nearest euro. Andorra: corporate income tax of 10%; dividend exempt for a resident shareholder and not taxed in Andorra for a non-resident. France: 15% up to €42,500 of profit for an eligible SME, 25% above that; dividend subject to the 31.4% flat-rate levy (12.8% income tax and 18.6% social levies in 2026). Middle column: excluding any application of the anti-abuse rules set out below.

The split between remuneration and dividends affects income tax (tax-free allowance, tax credit) and contributions: have it reviewed before setting the company’s distribution policy.

Shareholder or director still in France: what France can tax

A company incorporated in Andorra is resident there and subject to Andorran corporate income tax (Article 7 of Llei 95/2010). But when its shareholder or director stays in France, France has several levers, to be examined case by case with a professional:

• Place of effective management: if France also considers the company to be resident, because it is managed from France, the tax treaty attaches it solely to the State where its place of effective management is situated (Article 4, paragraph 3).
• Permanent establishment: if the company operates in France through a fixed place of business (office, branch, place of management) or through a person who habitually concludes contracts in its name there, the profits of that establishment are taxable in France (Articles 5 and 7 of the treaty).
• Dividends: paid to a shareholder resident in France, they are taxed there, in principle at the 31.4% flat-rate levy in 2026; Andorra, for its part, does not tax dividends paid to non-residents.
• Payment for services (Article 155 A of the French General Tax Code): sums received by a company established outside France for services provided by a person domiciled in France can be taxed in that person’s name: automatically if the company is subject to a privileged tax regime, and otherwise if that person controls the company or if the company does not mainly carry on another industrial or commercial activity.
• Structure with mainly financial assets (Article 123 bis): a person domiciled in France who holds at least 10% of an entity subject to a privileged tax regime, whose assets are mainly financial, can be taxed on their share of that entity’s profits, unless the safe-harbour clauses apply.
• Subsidiary of a French company (Article 209 B): a company subject to corporate income tax in France that holds more than 50% of an entity subject to a privileged tax regime can be taxed in France on that entity’s profits, subject to safe-harbour clauses.

With a tax of 10%, an Andorran company is in principle, according to our analysis, subject to a privileged tax regime (Article 238 A), which makes the last three rules relevant. Genuine activity in Andorra, with premises, resources and management on site, remains the first precaution: see our guide to domiciling your company in Andorra.

What about the 15% global minimum tax?

It concerns neither SMEs nor the self-employed: the OECD rules known as “Pillar 2” aim to guarantee a tax of at least 15% on the profits of multinational groups only, those whose consolidated turnover exceeds €750 million. At 10 October 2026, we have not identified any Andorran law transposing them. An Andorran subsidiary of a large group may nevertheless be affected by the rules applied in other countries: this is a matter for specialist advice.

Common misconceptions about Andorran corporate income tax