This is how Personal Income Tax works in Andorra

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Over the years we have seen how great famous figures have chosen the Principality as their place of residence for these issues, although in recent years it is when it has had more relevance.

All this without mentioning the list of youtubers and influencers who have also made the decision.

It is possible that, then, you have the following doubt: is it really worth living in Andorra because of the economic issue?

It's normal to wonder, and the answer is yes.

Living in Andorra brings with it many advantages, but without a doubt one of the most striking is its way of taxing taxes – although as soon as you live here for two months, you will fall so in love with nature, that the other will take a back seat.

Therefore, today we want to focus on personal income tax (IRPF), since you can imagine that it is a little different in this country.

If you are used to taxing in Spain, you will notice that here it is done very differently from the rest of European countries, which also makes it the most interesting.

In Spain they must retain the IRPF in their invoices, the self-employed registered in the second and third section of the heading of the Economic Activities Tax (professional activities and artistic activities) and all salaried workers must retain IRPF in their payroll.

In Andorra, however, personal income tax does not exist for salaries below 24,000 euros. From that amount, the Personal Income Tax will remain at 10%, while in Spain it would be at 37%.

And yes, that 10% is the highest rate in Andorra, when in Spain the highest rate is around 50%.

It is an abysmal difference that must be taken into account when having a business, without any doubt.

And although this already seems to you to be a great advantage, it is also essential to keep in mind that there are a number of exemptions in Andorra.

For example:

  • Exemption of the first € 3,000 in investment returns.
  • Exemption of 100% of the first € 24,000 in concept of income from work, and deduction of 50% of the next tranche of € 16,000.
  • Total exemption from dividends issued by an Andorran company and received by an Andorran resident.
  • No withholding tax on dividends from Andorran companies for non-residents.


If you are about to take the step, write us to tell you everything we could do to help you and make this step as pleasant and simple as possible.