Taxation in Andorra: the tax system, tax by tax

What taxes do you pay in Andorra, and at what rate?

In Andorra you pay a personal income tax, a corporate income tax, a non-resident income tax, a consumption tax, taxes on property purchases and parish taxes. Those who work also pay contributions to the CASS, Andorra’s social security system. This tax system is recent: most direct taxes were created between 2010 and 2015.

Statutory rates. The 0%, 5% and 10% IRPF scale is an effective scale: it results from the €24,000 tax-free allowance and a tax credit capped at €800.

Income tax: 0% up to €24,000, 10% at most

Personal income tax has a single statutory rate, 10%, applied separately to two bases: the general tax base (salaries, pensions, business activities, rents) and the savings tax base (interest, dividends, capital gains). In force since 1 January 2015, it applies to the worldwide income of tax residents, whether received in Andorra or abroad.

On the general tax base, a personal allowance of €24,000 is not taxed, and a tax credit (the bonificació) halves the tax due between €24,000 and €40,000, up to a limit of €800. The result is an effective scale in three bands:

up to €24,000of net general tax base

0%

from €24,000 to €40,000thanks to the tax credit

5%

above €40,000statutory rate

10%

Savings income, for its part, is taxed at 10% above an allowance of €3,000 a year, with no 5% band. Dividends paid by Andorran companies are exempt. Tax paid abroad on foreign income is credited against Andorran tax, up to the amount of the Andorran tax.

The tax return, form 300, is filed from 1 April to 30 September of the following year. Employers withhold tax at source from salaries, and the tax authority adjusts it each year. The full calculation, with worked examples, is in our guide to the Andorran income tax scale; our calculator lets you calculate your income tax.

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Businesses: corporate income tax, IGI and non-residents

corporate income taxwith a minimum tax since 2024

10%

IGI, general ratefrom 0% to 9.5% depending on the goods and services

4.5%

non-resident income tax (IRNR)5% on royalties

10%

Corporate income tax is 10% of profits. Since 2024, a minimum taxation rule prevents deductions from bringing the tax below 30% of gross tax, i.e. about 3% of taxable profit. A reduced regime remains for income from certain patents and software, whose tax base is reduced by 80%. The former regimes reserved for international trade and intra-group management were abolished in 2018: see our guide to corporate income tax in Andorra.

IGI is the Andorran equivalent of VAT, in force since 1 January 2013. Its general rate is 4.5%. It falls to 1% for food, water and books, to 0% for healthcare, education or residential lettings, and rises to 9.5% for banking and financial services. The details are in our guide VAT in Andorra (IGI).

Non-residents who earn income from Andorra are subject to a separate tax, IRNR: 10% as a general rule, 5% on royalties. The dividends and interest they receive from Andorra are exempt from it.

No wealth tax or inheritance tax: what you pay on property

Buying a property costs property transfer tax, the ITP: 1% for the State and a comú share of 0.5 to 3%, i.e. about 4% according to practitioners. A home sold by a professional, typically a developer, bears 4.5% IGI instead of ITP. Non-residents, and residents who cannot show 3 years of actual residence in the last 10 years, also pay the foreign property investment tax: 6% for one home, 10% beyond that.

On resale, a resident’s capital gain is taxed at 10%, with a surcharge of 10% within 2 years and of 5% between 2 and 5 years; the tax then tapers between 6 and 10 years, and is nil beyond that. A non-resident pays 25%, 20% or 15% depending on how long the property has been held. See capital gains on property in Andorra and our guide to buying property in Andorra.

Local taxes: foc i lloc and parish property taxes

The seven parish councils, the comuns, set several local taxes themselves, within the ranges laid down by the 2003 law on the finances of the comuns:

• the foc i lloc, payable for living in a parish: €5 to €50 a year per person aged 18 to 65 registered in the parish census;
• the property ownership tax: €0.30 to €3 per square metre of built area, weighted by a location index of between 0.5 and 2; the comú may exempt a main residence of less than 100 m²;
• the tax on rental income: 0.4 to 4% of rents, which can then be credited against income tax;
• the taxes on setting up business activities and on construction, the comú share of ITP and service charges, for waste for example.

There is no council tax on homes: the foc i lloc, which comes closest, is payable per person, not per home. The actual amounts vary from one parish to another: check with the comú where you live. Our guide to the seven parishes of Andorra presents each of them.

Who pays what, depending on your status?

The taxes you owe depend first on your tax residency, then on your activity. The main situations:

Summary. Residence status (active or passive residency, cross-border worker) does not on its own determine tax residency.

Holding a residence permit does not automatically make you a tax resident: you need more than 183 days of presence in the year, or the centre of your activities or economic interests in Andorra. For a French national, the question also arises on the French side, as our guide to tax residency in Andorra explains.

Cryptocurrencies and trading

A resident who disposes of cryptocurrencies in principle makes a capital gain, taxed in the savings tax base, at 10% above €3,000 a year; capital gains on shares, by contrast, are often exempt, even for an active investor. See our guide to cryptocurrency taxation in Andorra and our guide to tax on dividends and capital gains.

How much do you pay in total? Three examples (tax and CASS)

For an employee, income tax and the employee’s share of CASS together amount to about 8% of a gross salary of €40,000 and just over 12% at €100,000; the employer also pays 15.5% of the salary. An investor living off their capital, who pays no contributions, pays 10% of their savings income above €3,000 a year:

Indicative calculation, single person, with no other income or reductions. Employees: employee’s share of CASS (6.5%) and income tax using our calculator’s method, excluding the employer’s share. Investor: dividends from non-Andorran companies, taxed at 10% above €3,000, before credit for any foreign withholding tax; a passive resident does not pay CASS contributions but must take out private health insurance.

Contributions are detailed in our guide to CASS contributions, and the comparison with France in our guide to Andorra vs France taxes.

Milestones: a tax system built since 2010

Many ideas about Andorra date from before these reforms. Here are the verified milestones:

A tax-free Andorra? Three common misconceptions