Income Tax in Andorra

Income tax in Andorra at a glance (2026)

Updated April 2026. Income tax in Andorra is deliberately simple and the rates are among the lowest in Europe. The headline structure has not changed for 2026.

• Resident IRPF top rate: 10%
• Resident first bracket: 0% on the first EUR 24,000 of general income
• Resident savings allowance: EUR 3,000 per year exempt, then 10% flat
• Andorran-company dividends to residents: exempt
• Non-resident IRNR rate: 10% on Andorran-source income
• Filing window for residents: 1 April to 30 September for the previous tax year
• VAT (IGI): 4.5% standard rate, far below EU averages
• No wealth tax, no inheritance tax, no gift tax

If you are planning to move to Andorra, read this alongside our Andorra residency guide so your tax position and residency route work together. If you are also buying property in Andorra, see property buying costs for buyer taxes and fees on purchase.

Resident income tax in Andorra (IRPF)

IRPF is the personal income tax for Andorran tax residents. It applies to your worldwide income.

Savings and investment income

The first EUR 3,000 of savings income per year is exempt. Above that, savings income is taxed at a flat 10%. Savings income includes bank interest, bond coupons, and gains on financial instruments not classified as general income.

Dividends

Dividends from Andorran companies received by Andorran tax residents are exempt from IRPF. Foreign-company dividends are typically taxed at 10% unless a double tax treaty or specific relief applies. Andorra has treaties with France, Spain, Portugal, Luxembourg, Liechtenstein, the UAE, Malta, Cyprus and several others - the network is growing.

Capital gains

Capital gains on Andorran real estate are taxed under a separate property gains tax (plusvalua) which declines with the holding period and reaches 0% after long holding. Capital gains on financial instruments fall under savings income (10% above the EUR 3,000 allowance). For property-specific gains see property buying costs in Andorra.

Non-resident income tax in Andorra (IRNR)

IRNR is the income tax for non-residents on Andorran-source income.

• Standard rate: 10% on Andorran-source income (employment exercised in Andorra, local services, Andorran property rents)
• Property rentals: a 20% reduction is applied to gross rent before the 10% rate. Effective rate on gross rent is 8%
• Passive income: dividends and bank interest paid to non-residents are generally exempt from IRNR
• Treaties: double tax treaties may change who taxes specific income and reduce or eliminate withholdings

If you are renting out an Andorran property as a non-resident landlord, see property renting costs in Andorra for the full picture.

Worked examples

Numbers in EUR. Illustrative, not advice - confirm your specific situation before committing.

Resident salary EUR 60,000

• 0% on the first EUR 24,000 = EUR 0
• 5% on the next EUR 16,000 = EUR 800
• 10% on the remaining EUR 20,000 = EUR 2,000
• Total IRPF: EUR 2,800 (average rate 4.67%)

Resident salary EUR 100,000

• 0% on the first EUR 24,000 = EUR 0
• 5% band relief capped at EUR 800
• 10% on the remaining EUR 60,000 = EUR 6,000
• Total IRPF: EUR 6,800 (average rate 6.8%)

Resident savings interest EUR 5,000

• EUR 3,000 exempt
• 10% on EUR 2,000 = EUR 200
• Total tax on savings income: EUR 200

Non-resident landlord, EUR 2,000 per month gross rent

• 20% reduction applied to gross rent: taxable base EUR 1,600
• 10% IRNR on EUR 1,600 = EUR 160 per month
• Annual IRNR: EUR 1,920

Tax residency in Andorra - how it is determined

You are tax resident in Andorra if you spend more than 183 days a year in the country, or if your centre of economic interests sits in Andorra. Holding an Andorran residency permit does not automatically make you tax resident - the test is days and economic centre. Equally, you can become Andorran tax resident in fact without holding a residency permit, which is rare and rarely advisable. The clean position is to align both: residency permit + tax residency.

If you are uncertain, see the residency vs tax residency section on our Andorra residency guide.

Withholding, filing window and administration

• Employers and Andorran payers usually withhold and pay over the correct rate on employment and certain IRNR payments
• The annual return window for residents is 1 April to 30 September for the prior tax year
• Returns are filed online via the Andorran tax administration portal
• Tax identification number (NRT) is required and is issued at residency or at first relevant tax event
• The 5% band on IRPF is delivered through an equivalent relief mechanism rather than a literal 5% line on the return

Other Andorran taxes (in brief)

• VAT (IGI): 4.5% standard rate, with reduced rates of 1%, 2.5% and 9.5% for specific categories
• Corporate tax (IS): 10% standard rate
• Property transfer tax (ITP) on purchase: 4% headline (split 1% government, 3% comu/parish) - see property buying costs
• Property gains tax (plusvalua): declining scale based on holding period, 0% after long holding
• Wealth tax, inheritance tax, gift tax: none
• Social security (CASS): applies to active residents and employees - not strictly a tax but worth budgeting alongside IRPF

Andorra tax vs Spain, France and the UK

Headline comparison for context.

This is why people relocate. The trade-off is residency requirements (minimum stay days, address, source of funds, contributions on certain routes) - covered fully on the Andorra residency guide.

Frequently asked questions

What is the income tax rate in Andorra?

The top personal income tax rate (IRPF) is 10%. The first EUR 24,000 of general income is taxed at 0%, EUR 24,000 to EUR 40,000 at 5%, and above EUR 40,000 at 10%.

Is Andorra a tax haven?

Andorra is a low-tax jurisdiction, not a tax haven by current OECD standards. It signed automatic exchange of information (CRS) in 2017, has double tax treaties with France, Spain, Portugal, Luxembourg and others, and is no longer on the EU's non-cooperative jurisdictions list. Tax is genuinely low (10% top IRPF, 4.5% VAT, no wealth tax) but transparency rules apply.

How much is income tax in Andorra for a EUR 100,000 salary?

EUR 6,800 in IRPF (average rate 6.8%). Calculated as 0% on the first EUR 24,000, 5% on the next EUR 16,000 (capped at EUR 800), and 10% on the remaining EUR 60,000.

Do non-residents pay income tax in Andorra?

Yes, non-residents pay IRNR at 10% on Andorran-source income (employment, local services, property rents). Property rents get a 20% reduction before the 10% rate, so the effective rate on gross rent is 8%. Dividends and bank interest paid to non-residents are generally exempt.

Does Andorra have capital gains tax?

On Andorran real estate, yes, via a separate property gains tax (plusvalua) that declines with holding period and reaches 0% after long holding. On financial instruments, gains fall under savings income at 10% above the EUR 3,000 annual allowance.

Are dividends taxed in Andorra?

Dividends from Andorran companies received by Andorran tax residents are exempt. Foreign-company dividends are typically taxed at 10% unless a treaty or relief applies. Dividends paid to non-residents from Andorran companies are generally exempt from IRNR.

Does Andorra have a wealth tax or inheritance tax?

No. Andorra has no wealth tax, no inheritance tax and no gift tax.

What is the VAT rate in Andorra?

The standard VAT rate in Andorra (IGI) is 4.5%, with reduced rates of 1%, 2.5% and 9.5% for specific categories. This is the lowest standard VAT rate in Europe.

When do I file my Andorran tax return?

The annual return window for residents is 1 April to 30 September for the previous tax year. Returns are filed online via the Andorran tax administration portal.

How is tax residency in Andorra determined?

You are tax resident if you spend more than 183 days a year in Andorra, or if your centre of economic interests sits there. Holding a residency permit does not automatically make you tax resident; the day count and economic centre are the legal tests.

Does Andorra have double tax treaties?

Yes. Andorra has treaties with France, Spain, Portugal, Luxembourg, Liechtenstein, the UAE, Malta, Cyprus and several others. The network is growing. Treaties affect who taxes which income and may reduce or eliminate withholdings.

What is the corporate tax rate in Andorra?

The standard corporate tax (IS) rate is 10%. Specific reduced regimes apply to certain holding companies, intellectual property structures and international trade activities, subject to substance requirements.

How INVICO helps with Andorran tax planning

• High-level checks: resident vs non-resident, what your worldwide profile means in Andorra
• Practical registration and filings where relevant
• Coordination with your bank and employer on withholding mechanics
• Alignment with your residency route and move-in setup so tax, residency and practical setup do not contradict each other

For complex international structures we work alongside specialist Andorran tax advisors and your existing advisors abroad. We confirm the practical envelope; specialists handle the detailed tax engineering.

Notes and scope

This page summarises IRPF and IRNR mechanics for buyers, renters and new residents. Figures and rules are current to April 2026. Always confirm your specific situation before you commit. Tax law and treaty network change over time - if your decision turns on a specific number, confirm it with us or with a tax advisor at the time of filing.

Next step

Use this page alongside residency in Andorra and move to Andorra so tax, residency and practical setup stay aligned.