Andorran tax benefits

Simplicity and low tax burden

Andorra is one of the popular destinations in Europe with the most foreign investment thanks to its tax regulations.

There is no inheritance tax or wealth tax.

Companies are subject to the following taxes: the corporate tax (IS), the personal income tax that affects the owner of the company (IRPF), and an indirect one which is the IGI..

Andorran tax benefits

            Taxes and contributions in Andorra

The personal income tax (IRPF)

This tax is levied on the professional activity of the owners of the companies or of those who reside more than 183 days a year in the principality

0% - up to € 24,000 per year
10% - from € 24,000 per year

The general indirect tax (IGI) is the lowest in Europe with 4.5%

It would be the equivalent of the Spanish tax (IVA), and applied to the amount of service or product and is not registered in international trade. 

Corporate tax with a maximum rate of 10%

  • The Corporate Tax applied to the profits made by the company
  • It does not applyes to Holdings that have shares in other companies outside the principality, with certain countries such as Liechtenstein, Luxembourg, Spain, France and Portugaland thanks to the bilateral agreement of doble tax avoidance.

Companies subject to 2% Corporate Tax

Are those that carry out international trade, investment and financing activities or management of intangible assets

How is the Capital Gain calculated?

Sale within the 1st year - 15%
Sale within the 2nd year - 13%
Sale within the 3rd year - 10%
Sale within the 4th year - 9%

The income tax for non-residents (IRNR) is 10% of the income received:

Non-residents, such as border workers who live in Spain or France and who carry out their professional activity in Andorra, or people who work occasionally in Andorra, are subject to Andorran taxation via IRNR, which would be 10% of the income received.

Social Security contributions are among the lowest in Europe

The Andorran Real Estate Capital Gains Tax

This tax is levied on the sale of a property and its percentage varies depending on the years it has been owned by the seller. Government makes a retention of 5% of the amount of the capital gain for a period of 3 to 6 months to verify that there are no administrative penalties and to control the value of the declared asset.

Capital gain calculation

Sale within the 1st year - 15%
Sale within the 2nd year - 13%
Sale within the 3rd year - 10%
Sale within the 4th year - 9%

From the 4th year the rate decreases by 2% per year, which means that the property is tax-free after 10 years of ownership.

In summary

ENTERPRISE

10%

Corporate tax

INCOME

10%

Income tax

PITPersonal income tax

0%

10%

VAT

4,5%

Lowest Value Added Tax (VAT) in Europe.

SUCCESSIONS AND INHERITANCES

0

There are no successions or inheritance taxes and social security contributions are among the lowest in Europe

REAL ESTATEAndorran real estate capital gains tax

0 - 15%
  • Sell within the 1st year: 15%
  • Sale from 1 year: 14%
  • Sale from 2 year: 13%
  • Sale from 3 year: 12%
  • Sale from 4 year: 10%
  • Sale from 5 year: 8%
  • Sale from 6 year: 6%
  • Sale from 7 year: 4%
  • Sale from 8 year: 2%
  • Sale from 9 year: 1%
  • Sale from 10 year: 0%

From the 4th year, the rate decreases by 2% per year, which means that the property is tax-free after 10 years of ownership