Tax
VAT in Andorra: IGI, its six rates and its rules
The general indirect tax (IGI) is the Andorran equivalent of VAT. Its general rate is 4.5%, compared with 20% for French VAT, and five special rates apply to certain goods and services. Here is the scope of each rate, the rule for property and what IGI means for a business.
- general rate
- 4.5%
- food, water, books
- 1%
- banking and financial services
- 9.5%
- French VAT at the standard rate, for comparison
- 20%
Key points
- IGI has applied since 1 January 2013 to supplies of goods, supplies of services and imports.
- The general rate is 4.5%; rates of 0%, 1%, 2.5%, 3.5% and 9.5% apply to specific goods and services.
- A home sold by a professional bears IGI; a sale between private individuals falls under property transfer tax (ITP), never both.
- As with VAT, a business charges IGI, deducts the IGI it has paid on its purchases and pays over the difference.
- In France, VAT is 20% at the standard rate, with rates of 10%, 5.5% and 2.1%.
- As Andorra is not a member of the European Union, the intra-Community VAT system does not apply between France and Andorra.
On this page 9 sections
- Is there VAT in Andorra? IGI in brief
- VAT rates in Andorra: the six IGI rates
- VAT in France and in Andorra: 20% versus 4.5%
- Property: IGI or property transfer tax?
- Businesses: charging, deducting and declaring IGI
- France–Andorra: no intra‑Community VAT
- Common misconceptions about IGI
- Frequently asked questions
- Sources
Is there VAT in Andorra? IGI in brief
The general indirect tax (IGI, in Catalan “impost general indirecte”) is a consumption tax: the business charges it to its customer, and it is the final consumer who bears it. Created by Llei 11/2012, it has applied since 1 January 2013 to supplies of goods and services made in Andorra by businesses and professionals, as well as to imports of goods.
It should not be confused with two other taxes that affect property: property transfer tax (ITP), due on certain property sales, and the foreign property investment tax, due from buyers who are non-resident or have recently settled in Andorra. The full overview is in our guide to taxes in Andorra and their rates.
VAT rates in Andorra: the six IGI rates
IGI has six rates: the general rate of 4.5%, which applies by default, and five special rates reserved for the goods and services listed in the law.
| Rate | What it applies to | Legal text |
|---|---|---|
| 4.5%general rate | All goods and services not covered by another rate | Article 57 |
| 1% | Food products (excluding alcoholic drinks), water, books, newspapers and magazines that are not mainly advertising, sanitary protection and nappies | Article 58 |
| 0% | Health and hospital care, social welfare, education and training, certain sporting and cultural activities, transport of patients, reimbursable medicines, residential lettings, transfers of social or affordable housing | Article 59 |
| 2.5% | Passenger transport (excluding cable transport), certain private cultural services, works of art, collectors’ items and antiques | Article 60 bis |
| 3.5% | Purchase of a home intended for permanent residential letting, for at least 5 years, by a buyer who is not a professional | Article 60 ter |
| 9.5%the highest rate | Banking and financial services | Article 60 |
Summary of Articles 57 to 60 ter of Llei 11/2012, whose consolidated text sets out the conditions for each category. No change to the rates was made in 2025 or in 2026.
Calculating IGI, from the price excluding tax to the price including tax
IGI is calculated on the price excluding tax, then added to it. At the general rate, €1,000 excluding tax gives €45 of IGI, i.e. €1,045 including tax; at the 1% rate, €1,000 excluding tax gives €1,010 including tax. To find the price excluding tax, divide the price including tax by 1.045 at the general rate: €209 including tax corresponds to €200 excluding tax and €9 of IGI. Indicative calculation.
VAT in France and in Andorra: 20% versus 4.5%
In metropolitan France, VAT has four rates: 20% (standard rate), 10%, 5.5% and 2.1%. A few official examples allow a direct comparison:
| Example | Andorra (IGI) | France (VAT) |
|---|---|---|
| Standard or general rate | 4.5% | 20% |
| Cosmetics and toiletries (cream, soap, shampoo) | 4.5% | 20% |
| Feminine sanitary protection | 1% | 5.5% |
| Medicines reimbursed by social security | 0% | 2.1% |
France: rates and examples published by service-public.gouv.fr for metropolitan France. Andorra: Llei 11/2012 (cosmetics fall under the general rate).
The gap is most visible on everyday consumer goods, taxed at 4.5% in Andorra compared with 20% in France. This does not mean that everything costs less there: prices also depend on margins, and housing weighs heavily in the budget, as our guide to the cost of living in Andorra explains.
El tipus de gravamen general és d’un 4,5% i s’exigeix sempre que no es prevegi expressament l’aplicació d’un altre tipus de gravamen (the general tax rate is 4.5% and applies unless the application of another tax rate is expressly provided for).
Property: IGI or property transfer tax?
A property sale never bears both taxes at once. The ITP law excludes from its scope sales of real property made by businesses in the course of their activity, which fall under IGI:
Sale by a professional
IGI
- Typically a new-build home sold by a developer
- 4.5% in principle
- 3.5% if the private buyer lets the home for at least 5 years as a permanent residence
- 0% for a first home that meets the conditions for the ITP exemption, or for social or affordable housing
Sale between private individuals
ITP
- Typically a resale home
- 1% for the State and 0.5 to 3% for the comú
- About 4% in total according to practitioners
- Possible exemption for a first home of less than €600,000, subject to residence and income conditions
In both cases, a buyer who is non-resident, or has been resident for less than 3 years in the last 10 years, also pays the foreign property investment tax: 6% for one home, 10% beyond that. Renting out a home as a residence, by contrast, is taxed at 0%. All purchase costs are detailed in our guide Buying property in Andorra.
Businesses: charging, deducting and declaring IGI
A business established in Andorra charges IGI on its sales, deducts the IGI it has paid on purchases used for its taxable activity, then pays over the difference. Some expenses do not give a right to deduction: food, drink, tobacco, restaurants or hotels, as well as goods and services that are not used exclusively for the activity.
| Turnover | Returns |
|---|---|
| Less than €250,000 | Half-yearly (July and January) |
| From €250,000 to less than €3,600,000 | Quarterly (April, July, October and January) |
| €3,600,000 and above | Monthly |
Article 78 of Llei 11/2012. A simplified regime exists for small businesses, up to €100,000 of turnover, with half-yearly returns.
The person liable for IGI is in principle the seller or the service provider. When the supplier is not established in Andorra, however, it is the recipient established in Andorra who becomes liable for the tax, in the cases provided for by law: an Andorran business that buys a service from a foreign provider must therefore check whether it has to declare the corresponding IGI itself.
Services supplied to clients established outside Andorra are subject to place-of-supply rules that must be examined transaction by transaction: depending on the nature of the service and the status of the client, Andorran IGI may not apply. This is a point to confirm with a professional, especially for an e-commerce or online services business. See also the accounting and reporting obligations of an Andorran company.
France–Andorra: no intra-Community VAT
Andorra is not a member of the European Union: the intra-Community VAT system, which is specific to trade between Member States, does not apply between France and Andorra. An Andorran business therefore has no intra-Community VAT number that can be checked in the European VIES system; it is identified by its NRT. Goods entering Andorra bear IGI on import, and the place of supply of each service must be determined according to its nature and its client. Invoice details, exports and the reverse charge are covered in our guide to invoicing between France and Andorra; the freelancer profile covers the case of French clients of a freelancer in Andorra.
Common misconceptions about IGI
Frequently asked questions
What is the VAT rate in Andorra?
Andorra has no VAT in the French sense, but a general indirect tax (IGI) that works in a comparable way. Its general rate is 4.5%, with rates of 0%, 1%, 2.5%, 3.5% and 9.5% for specific goods and services.
Do residential rents bear IGI?
No. The letting of buildings intended exclusively as homes, governed by the law on urban leases, falls under the 0% rate.
Do you buy a new-build home with IGI or with property transfer tax?
With IGI when the seller is a professional, typically a developer: 4.5% in principle, 3.5% if the private buyer lets the home for at least 5 years as a permanent residence. Sales made by businesses in the course of their activity are excluded from property transfer tax (ITP).
Does a small business file IGI returns every month?
No. The frequency depends on the previous year’s turnover: half-yearly returns below €250,000, quarterly up to €3,600,000, monthly above that.
Can you recover the IGI paid on your business purchases?
Yes. A business or a professional deducts the IGI borne on goods and services used for their taxable activity. Some expenses are excluded, such as food, drink, tobacco, restaurants or hotels.
Are banking services taxed in Andorra?
Yes. Banking and financial services are subject to an increased rate of 9.5%, the highest IGI rate, compared with 4.5% at the general rate.
Why does Andorra not apply European VAT?
Because it is not a member of the European Union: the customs union concluded with the EU in 1990 only covers industrial products (chapters 25 to 97 of the Harmonised System). Andorra therefore has its own consumption tax, IGI, applied since 1 January 2013 with its own rates, and its trade with France does not fall under the intra-Community VAT system.
Sources
- Llei 11/2012 on the general indirect tax (IGI), consolidated version (opens in a new tab) portaljuridicandorra.adRates (art. 57 to 60 ter), deductions (art. 61 to 66), imports (art. 46), frequency of returns (art. 78).
- Law of 29 December 2000 on the property transfer tax (opens in a new tab) portaljuridicandorra.adSales made by businesses outside the scope of ITP (art. 1.2); rates; first-home exemption.
- Llei 3/2024 on the foreign property investment tax (opens in a new tab) portaljuridicandorra.adRates of 6% and 10% since 13 February 2026.
- Service-public.gouv.fr: VAT rates in France (opens in a new tab) entreprendre.service-public.gouv.frRates of 20%, 10%, 5.5% and 2.1% in metropolitan France, with examples.
- Agreement in the form of an exchange of letters between the EEC and Andorra (Decision 90/680/EEC) (opens in a new tab) eur-lex.europa.euCustoms union limited to industrial products.
- European Commission: customs union with Andorra (opens in a new tab) taxation-customs.ec.europa.euCustoms union established in 1990, covering products in chapters 25 to 97 of the Harmonised System.
- Your Europe: check a VAT number (VIES) (opens in a new tab) europa.euVIES checks the registration of businesses for cross-border trade within the EU.
Consolidated texts on the Portal jurídic d’Andorra have no official value: only the version published in the BOPA is authentic. How we verify.
General information, not advice. This guide sets out the rules in force on 11 October 2026, based on official texts. It is no substitute for a professional review of your situation (lawyer, tax adviser, gestoria). Spotted an error or a change? Write to us.
Further reading
