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Andorra Tax Guide

Europe
Last verified September 2026
Sources & verification

Figures on this page were last verified against the cited sources in September 2026. Always check official sources before making a relocation or incorporation decision.

PwC Worldwide Tax Summaries — AndorraGovern d'Andorra — Departament de Tributs i de FronteresOECD Corporate Tax Statistics
Low Rate

Best for

  • Corporate-friendly

    10% corporate tax — competitive for founders and holding structures.

  • Special regime available

    Passive residency (residència sense activitat lucrativa) — Requires EUR 600,000 invested in Andorra (bond, property or business) plus a EUR 50,000 deposit with…

Personal Tax Score
84/100
Very Tax Friendly
Business Tax Score
86/100
Very Tax Friendly

Personal Income Tax

Tax Residency

Day Threshold
183 days
Note
183 days, or centre of economic interests in Andorra. Passive residency permits require only 90 days of presence.

Income Tax Rates

Top Marginal Rate
10%
Structure
Progressive 0% to EUR 24,000 / 5% to EUR 40,000 / 10% above

Foreign Income Treatment

System
Worldwide
Details
Worldwide income taxed at the same 0/5/10% scale, with foreign tax credits and 20+ double-tax treaties (Spain, France, Portugal, Luxembourg, UAE among them).

Investment Income

Capital Gains
10%
Dividends
Andorran dividends exempt / foreign 10%%
Interest
10% above EUR 3,000 allowance%

10% on gains generally. Gains on shareholdings under 25% are exempt. Real estate gains taxed on a sliding scale from 15% (year 1) to 0% after 10 years of ownership.

Wealth & Inheritance

Wealth Tax
No - No wealth tax
Inheritance Tax
No - No inheritance, estate or gift tax

Special Regimes

Passive residency (residència sense activitat lucrativa)
Requires EUR 600,000 invested in Andorra (bond, property or business) plus a EUR 50,000 deposit with the AFA, and 90 days of presence per year.
Active residency
For those working or running a company in Andorra; 183 days of presence required.

Practical Notes

A 10% ceiling on income, gains and corporate tax inside Europe, no wealth or inheritance tax, and a small, stable jurisdiction wedged between Spain and France. Not in the EU or the euro-area formally (uses the euro by agreement), so EU freedom-of-movement rules do not apply. Housing supply is tight and prices have climbed sharply with inflows of content creators and traders.

Business & Corporate Tax

Corporate Income Tax

Headline Rate
10%
Effective Rate Note
10% standard; 2% effective for qualifying holding companies on participation income; new companies pay 5% on the first EUR 50,000 in their first 3 years
Free Zone / Incentives
No free zones. Special regimes for international IP exploitation (80% exemption, being phased) and collective investment vehicles (0%).

Withholding Taxes

Dividends
0%
Interest
0%
Royalties
5%

VAT / GST

Rate
4.5%
Note
4.5% IGI (general indirect tax) standard — among the lowest in Europe; 9.5% on banking and financial services; 1% on food and books

Compliance & Substance

Substance Requirements
Moderate - resident director and real office expected; banks apply strict KYC
Compliance Friction
Low-moderate - small administration, Catalan-language filings

Notable Regimes

  • 10% flat ceiling on personal and corporate income
  • 4.5% IGI
  • Passive residency by investment

Data Sources

PwC Worldwide Tax Summaries — AndorraGovern d'Andorra — Departament de Tributs i de FronteresOECD Corporate Tax Statistics

Last verified: September 2026. Always check official sources before making a decision.

FAQ

What is the personal income tax rate in Andorra?

Andorra has a top personal income tax rate of 10%. The tax structure is: Progressive 0% to EUR 24,000 / 5% to EUR 40,000 / 10% above. See the detailed breakdown above and verify with official sources.

Do I need to pay tax on foreign income in Andorra?

Andorra uses a worldwide system for foreign income. Worldwide income taxed at the same 0/5/10% scale, with foreign tax credits and 20+ double-tax treaties (Spain, France, Portugal, Luxembourg, UAE among them).

What are the residency requirements for Andorra?

Tax residency in Andorra generally requires 183 days of physical presence. 183 days, or centre of economic interests in Andorra. Passive residency permits require only 90 days of presence.. Always verify current rules with official sources.

Is there a wealth tax in Andorra?

No, Andorra does not have a wealth tax. No wealth tax

What is the corporate tax rate in Andorra?

The corporate tax rate in Andorra is 10%. 10% standard; 2% effective for qualifying holding companies on participation income; new companies pay 5% on the first EUR 50,000 in their first 3 years

US citizen moving to Andorra? Read this first.

Andorra's mid-range personal tax rate (10%) makes the FEIE-vs-FTC choice less obvious for US citizens.

  • •If your earned income is at or below the ~$130k FEIE cap and your local effective rate is low, FEIE may dominate. If income is significantly above the cap, FTC usually wins.
  • •Both can be combined on different income streams in the same year, but FEIE once revoked cannot be re-elected for 5 years without IRS consent — choose carefully.
  • •Self-employment tax is owed in full — Andorra has no totalization agreement with the US.
  • •Investment income (dividends, capital gains): taxed by Andorra at local rates, then FTC offsets the US side.
Read the full US-citizen moving-abroad guide

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