Dividends, savings and capital gains: tax in Andorra

How is savings income taxed in Andorra?

For a tax resident, income from movable capital (interest, dividends, investment income) and capital gains make up the savings tax base. It is taxed separately from salaries and pensions, according to a simple rule:

allowance a yearon all savings income

€3,000

above thatsingle rate

10%

5% bandunlike earned income

None

The €24,000 personal allowance and the income tax credit (the bonificació) do not apply to savings income. Banks withhold tax on the income they pay out; form 345 lets you ask them to take the allowance into account, provided that you settle the difference in your tax return if your income exceeds it. How the tax works in general is explained in our guide to Andorran income tax (IRPF), and the profile guide living off your investments in Andorra brings together the points that matter for financial wealth.

Tax on dividends in Andorra: Andorran dividends exempt, foreign dividends taxed

Dividends paid by an Andorran company subject to corporate income tax are exempt, as are distributions by collective investment undertakings governed by Andorran law that are subject to that tax. The profit distributed has already borne corporate income tax at 10%.

Dividends from foreign companies are taxed at 10% in the savings tax base. If tax was withheld in the company’s country, a deduction avoids double taxation: it is equal to the lower of two amounts, the tax paid abroad or the Andorran tax corresponding to those dividends.

Interest and investment income

Interest on accounts, deposits or bonds is taxed at 10% above the €3,000 allowance, which is shared with the other savings income. Interest on Andorran public debt is exempt.

For French-source interest, the treaty limits the tax levied in France to 5% of the gross amount, and Andorra deducts this tax from its own, up to the amount of the Andorran tax. Some interest is taxable only in Andorra, for example interest paid by the French State or by one financial institution to another.

Capital gains on shares, funds and trading: often exempt

The sale of company shares is exempt in two cases:

• your holding, together with that of your spouse or partner, your family up to the third degree and the entities related to you, did not exceed 25% of the capital, equity, profits or voting rights during the 12 months before the sale;
• or you have held the shares sold for at least 10 years, whatever the size of your holding.

Capital gains on units in investment funds benefit from the same exemption. One important exception: no exemption applies to shares in companies at least 50% of whose assets consist, directly or indirectly, of real property located in Andorra. Outside these cases, the gain is taxed at 10% in the savings tax base.

These conditions do not take into account how often you trade: an individual who frequently buys and sells listed shares, with small holdings, in principle meets the first one. If trading takes the form of a genuine professional activity, have its tax treatment checked by a professional.

Under the treaty, the gain from a substantial holding, i.e. 25% or more of a company’s profits, is taxable in the State where the company is resident: an Andorran resident who sells such a holding in a French company can therefore be taxed in France. Other capital gains on securities are taxable only in the seller’s State of residence. See our guide to the France⁠–⁠Andorra tax treaty.

Cryptocurrencies. These are not company shares: the exemption above does not cover them. For a resident, the gain on their disposal in principle counts as a capital gain, taxed in the savings tax base; their regime is presented in our guide to cryptocurrency taxation in Andorra.

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Capital gains on property in Andorra: from 20% to 0% after 10 years (residents)

A resident who sells a property located in Andorra pays 10% on the capital gain, in the savings tax base, plus a speculative surcharge of 10% within 2 years of ownership and of 5% between 2 and 5 years. Between 6 and 10 years, the gain is reduced by a coefficient of 0.8, then 0.6, 0.4 and 0.2; after 10 years, it is no longer taxed. Since 1 January 2024, this regime has replaced the former specific tax on capital gains on property.

Indicative calculation: 10% income tax plus the surcharge, applied to the gain as reduced by the coefficient where applicable. Excluding the annual €3,000 allowance of the savings tax base.

The seller makes a payment on account of 10% of the gain at the time of the sale: at the same time as the notarial deed, or within 30 days of a private contract. If the property has been let, the depreciation deducted from the rents reduces the acquisition price used.

The gain on a main residence is exempt if the price is reinvested, within one year, in a new main residence in Andorra: this advantage is reserved for Andorran nationals and for foreigners who can show 5 years of legal residence. For purchase costs, see Buying property in Andorra.

Capital gains on property for a non-resident

A non-resident who sells a property located in Andorra is subject to non-resident income tax (IRNR), at higher rates:

Article 29 of Llei 94/2010, as amended by Llei 5/2025.

The buyer must withhold 5% of the total price and pay it to the tax authority; this withholding is then credited against the tax due from the seller. Beyond 10 years of ownership, the law does not set a specific rate in the list in Article 29: have this case checked by a professional before the sale.

For a seller resident in France, the treaty allows Andorra, where the property is located, to tax the gain. France can also tax it, granting a credit equal to the Andorran tax, up to the amount of the corresponding French tax.

Investments and assets kept in France, passing on wealth

An Andorran resident who sells a property located outside Andorra is not taxed in Andorra on the gain if they have owned it for at least 10 years; otherwise, the gain goes into the savings tax base, at 10%. For a property located in France, the treaty allows France to tax the gain under its own rules; Andorra then deducts the French tax from its own, up to the amount of the Andorran tax.

Financial investments kept in France follow the rules set out above: their dividends and interest go into the Andorran savings tax base, and any tax withheld in France, capped by the treaty, is credited against Andorran tax. The gains on a life insurance policy are also savings income for an Andorran resident (see the specific question below).

Passing on wealth is outside the scope of income tax: inheritances, legacies and gifts are not taxed in the hands of the beneficiary, and the deceased’s gain is exempt. A gift to someone who is not a close relative can, however, give rise to a taxable capital gain for the donor, and a gift of real property to a third party remains subject to property transfer tax. France, for its part, can tax assets located in France and heirs domiciled there: see our guide to France⁠–⁠Andorra inheritance tax.

Common misconceptions about savings income and capital gains