Taxes in Andorra

The Departament de Tributs i de Fronteres administers most national taxes through the Govern d’Andorra and the Ministeri de Finances. Each Comú applies its own ordinances for municipal taxes such as foc i lloc, property ownership, rental income, commercial or professional activity registration, construction and vehicle-related charges. Rates, exemptions, bases and deadlines can therefore differ between municipalities and should be checked with the responsible Comú. Andorran tax residence generally applies to an individual who spends more than 183 days in Andorra during the year, including certain sporadic absences, unless the person proves tax residence elsewhere. It can also arise when the centre of economic or personal interests is in Andorra. A spouse and minor children who are not legally separated can create a residence presumption in some circumstances. Nationality alone does not establish tax residence, and daily commuters from Spain or France are generally treated as non-residents. IRPF is Andorra’s personal income tax. It covers worldwide income from employment, economic activities, real estate capital, movable capital, capital gains and certain income attributed through transparent structures. The nominal rate is 10%. The first 24,000 EUR of the taxable base benefits from the minimum allowance, and the 24,001 to 40,000 EUR range has an effective rate of about 5% through a maximum 800 EUR tax credit; amounts above 40,000 EUR are generally taxed at 10%. For savings income, the first 3,000 EUR is exempt and the remainder is generally taxed at 10%. Individuals with economic income generally file an IRPF return. Filing can also be required when gross employment or real estate capital income reaches at least 24,000 EUR, when non-withheld movable capital exceeds 3,000 EUR, or when capital gains arise. The usual filing period runs from 1 April to 30 September of the following year through the Seu Electrònica, MIL or an electronic certificate. Employers and other payers may withhold tax; the Department calculates employment withholding with relevant reductions and credits, while movable capital is generally subject to 10% withholding. Rental income can qualify as real estate capital or as income from an economic activity. At least six rented or offered properties, or gross rental income above 100,000 EUR, can support classification as an economic activity under the applicable criteria. An election for real estate capital treatment may bind the taxpayer for the current year and the following two years. Inheritances, legacies and gifts do not normally fall under IRPF, while gains from real estate sales generally belong to plusvàlua unless they arise from an economic activity. IS is corporate income tax for resident legal entities, investment companies, public bodies and parastatal entities. A company can be resident through Andorran incorporation, its registered office, effective management or a transfer of residence to Andorra. The tax covers worldwide income and usually starts from the accounting result adjusted by statutory tax corrections. The standard rate is 10%. An investment company without a management company can fall under a 0% regime, while special regimes may apply to intangible assets, cooperatives, fiscal consolidation, new investments and holding structures. The tax period normally follows the financial year. The return is due in the month after six months have elapsed from the end of the period, and an advance payment is generally due on the first day of the ninth month. The advance commonly equals 50% of the previous year’s final liability. Companies must retain annual accounts, profit and loss statements, balance sheets and participation or administrator information. A simplified return may be available below 600,000 EUR of total turnover, while country-by-country information, related-party rules, transfer pricing and economic substance may apply in specific cases. IRNR is non-resident income tax on income connected with Andorra. Examples include services performed in Andorra, consulting, training or events consumed in Andorra, rents from Andorran property, CASS-related salary income and certain pensions. The general rate is 10% of the invoice amount, with separate rates such as 5% for royalties and 1.5% for reinsurance. A 20% reduction of the tax base can apply to property rental income. An Andorran payer generally withholds the tax and reports it quarterly in April, July, October and January. A tax representative may be required when a private payer or a permanent establishment is involved. Frontier workers and temporary workers are generally non-residents; without a special election, their employer withholds 10%. They can elect IRPF rules and appoint a tax representative within ten days of starting work using Forms 740 or 740-A. The special calculation can include a proportionate 24,000 EUR allowance, CASS and 3% deductions and applicable credits. IGI is the general indirect tax on paid supplies of goods and services by businesses and professionals and on imports. A person can be treated as carrying out an economic activity habitually or occasionally. Renting property is treated as an economic activity for IGI purposes. The general small-activity threshold is 40,000 EUR of turnover, except where the taxpayer opts into the regime; agriculture and livestock have a separate 150,000 EUR threshold. The general IGI rate is 4.5%. Other rates include 0% super-reduced, 1% reduced, 2.5% special and 9.5% increased. Certain health, education, social services, residential rents and CASS-reimbursed medicines can be taxed at 0%; food, water and books commonly use 1%; passenger transport and selected cultural services use 2.5%; and banking and financial services use 9.5%. An IGI invoice must show the NRT, taxable base, rate, tax amount and total amount, and the tax must be passed on in full. The amount payable equals output IGI minus deductible input IGI. Businesses with turnover below 250,000 EUR generally file twice a year in July and January; those below 3,600,000 EUR generally file quarterly in April, July, October and January; and those at or above 3,600,000 EUR generally file monthly. Newly registered businesses generally begin with quarterly filing. Electronic filing is required. A refund is paid by bank transfer. Late returns require payment on the same day, and a simplified regime may apply below 100,000 EUR turnover if requested in the previous year or within one month of starting a new business. Under that regime, input tax can be calculated as a flat 3% for trade and 1.5% for other activities. Property transactions can trigger several separate taxes. ITP is the indirect property transfer tax paid by the purchaser or holder of the relevant right. It generally applies to transfers or creation or assignment of rights in rem, uses the real transaction value as its base and totals 4%, consisting of 1% for the Govern and 3% for the Comuns, subject to exemptions and reduced or zero-rated IGI cases. Plusvàlua is a direct tax on a positive increase in property value in inter vivos transfers, whether paid or free of charge, and on certain rights in rem. The seller is generally liable, the base is the real sale value minus the acquisition value and rates range from 1% to 15%. Exemptions or reductions can apply to a main residence, family relationships, restructuring and group transactions. For non-residents, a 5% advance payment or withholding on the gain may apply. ITP concerns the purchaser, whereas plusvàlua concerns the seller. IIEIA is the tax on foreign real-estate investment. Since 13 February 2026, the rate is 6% for a first property and 10% for a second or subsequent property under the applicable investor category. It can affect foreign individuals, foreign legal entities and certain Andorran structures with foreign participation. Exceptions, credits, notarial evidence, economic activity and ten-year holding conditions require separate checking. Buying property does not automatically create tax residence or tax exemption. IHB applies to a vacant dwelling that has been rentable but remains empty for more than two years without a recognised reason. Exceptions can include a family or holiday second home, a tax or company seat, economic use, relocation for work or health reasons and a property clearly offered for sale. The vacant-home registration is generally due within two months, the base is usable floor area, the rate is 5.05 EUR per square metre and the reference date is 31 December, with settlement in the last quarter after the reference year. IEAT is the tourism accommodation tax. The accommodation provider collects it, registers censal information and the relevant ROAT data, and files quarterly with the Departament de Tributs i de Fronteres. The charge is 3 EUR for five-star accommodation, 2 EUR for four-star accommodation, four-espigues accommodation or HUT, 1.50 EUR for two- or three-star or two- or three-espigues accommodation and 1 EUR for other categories. Exemptions can include residents, children under 12, stays exceeding 14 days in the same place and certain social or force-majeure situations. ISI is a 4% tax on insurance services based on the insurance premium and is generally paid by the insurer. Reinsurance, international goods transport and certain CASS supplementary benefits can be exempt. Special charges can apply to the import or manufacture of alcohol, tobacco and hydrocarbons, with product-specific tariffs and payment generally at import or manufacture. Gambling tax ranges from 3% to 25% according to the activity. Andorra also has a carbon-emissions tax, an open-home tax and other sector-specific charges established by current legislation. Andorra is not an EU member, but it has a customs union with the EU for certain goods. Industrial imports from third countries generally follow the EU common external tariff and equivalent conditions, while agricultural products can fall outside the customs union and require checks of the Taxa al consum, TEC and other customs procedures. Import IGI, origin, customs value and the intended import or export procedure must be assessed through the Duana. Before carrying out a taxable activity, a business or professional generally files a censal declaration and obtains an NRT. Non-resident entities and some activities may need registration or a fiscal representative. The DTF, Seu Electrònica, MIL and an electronic certificate support electronic procedures. Common forms include Form 300 for IRPF, 805 for IS, 900 for IGI, 700 or 710 for IRNR, 100 for ITP, 750 for IIEIA and 050 for the vacant-home regime. Taxpayers should retain invoices, accounting records, supporting documents, annual accounts and tax registers for the applicable retention period. Taxes can be paid through self-assessment, withholding, advance payment, bank debit, transfer or card. Refunds normally use bank transfer. Official procedures also exist for correcting an assessment, requesting repayment of an undue payment, seeking a deferral or instalment plan and applying for set-off. Late filing or payment can produce surcharges, late-payment interest and penalties. There is no general requirement to appoint a tax adviser, but professional support is practically useful for complex businesses, property transactions and private cross-border situations. The DTF can conduct administrative reviews and inspections and can request information, records, evidence and cooperation. Administrative acts and penalties can be challenged through the applicable administrative appeal under Llei 21/2014 and related rules; the exact deadline must be taken from the decision or official form. Tax treaties published in the BOPA can take precedence for covered issues involving IS, IRPF, IRNR and property gains. Treaty allocation rules may concern property, business profits, dividends, interest, royalties, employment, pensions and capital gains. Andorra has treaties with several countries, including Spain, France, Portugal, Luxembourg, the United Arab Emirates, Cyprus, Malta, Liechtenstein, San Marino, Hungary, Croatia, Czechia, Monaco, Iceland, the Netherlands, South Korea, Lithuania, Montenegro and Latvia, but the current treaty list must be checked. A DTF certificate of tax residence may be needed, and relief from double taxation depends on the applicable treaty or national law through exemption or credit methods. Under Llei 19/2016 and related international standards, financial institutions apply due diligence, obtain tax-residence self-certifications and report relevant financial accounts for automatic exchange with EU and other participating partners under MCAA, TIEA or tax treaties. Expanded OECD reporting standards may cover electronic money and digital assets from 2026, subject to the current implementation status. An Andorran bank account therefore does not create anonymity. CASS contributions and employment law remain separate from tax law, except where CASS payments affect withholding or an IRPF deduction. Inheritances and gifts also require separate analysis of property transfers, ITP, plusvàlua, IIEIA and foreign-source taxation rather than an IRPF-only assessment.