Your Guide to Taxes in Andorra: 2023 Update

Taxes in Andorra

We live in times where economic uncertainty is the order of the day. The taxes in Andorra are characterized by being very non-aggressive.

Andorra’s tax system is friendly to both individuals and legal entities (companies). But, surprisingly, there are many people who continue to erroneously associate the Principality of Andorra as a tax haven, but it is not. No way. Andorra stopped being a tax haven several years ago.

Even so, millions of people continue to consider Andorra as a tax haven because the country where they currently live is a true tax hell.

Why do many people finally decide to live in Andorra?

Because there are tax hells. Yes, they exist and they are increasing. Who lives in Spain or France will know what we are talking about. Compared to other countries, Andorra’s tax system is quite simple.

Summary of tax types, sections and percentages:

  • Personal income tax: 0-10%
  • Company profit tax: 10%
  • People earn €24,000 a year, they have a tax rate of 0%. But the range from €24,001 to €40,000 per year is subject to a 5% tax. For those people who earn more than €40,000 a year, they have a 10% tax.
  • Married couples whose combined total income is less than €40,000 have a 0% tax rate. Then, above this figure, it is taxed at 10%.
  • The IGI (sales tax): 4.5% In Spain it is known as VAT, in France as TVA and in Anglo-Saxon countries as VAT.
  • There are no estate taxes.
  • There is no donation tax.
  • There is no inheritance tax.
  • Property:
    • Capital gains tax on Andorran real estate: 0-15%
    • If you sell within the 1st year: 15%
    • If you sell within the 2nd year: 13%
    • If you sell within the 3rd year: 10%
    • If you sell within the 4th year: 9%
    • From 4th year to forward, the rate decreases by 1% per year, which means that the property is tax free after 12 years of ownership.

If you want more up-to-date and detailed information on official taxation, you can contact the Government of Andorra.

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