Andorra personal tax: income, investments and moving in

Who becomes tax resident

Andorra tests personal residence through more than 183 days in the calendar year or the principal base or centre of economic activities or interests. A rebuttable family presumption can also matter where a spouse who is not legally separated and dependent minor children habitually reside in Andorra. Permission to live in the country and domestic tax residence answer different questions.

The ninety-day presence condition associated with certain immigration permissions is therefore not a ninety-day tax-residence safe harbour. Equally, keeping fewer than 184 days does not settle a case where the economic-interest or family tests apply. Preserve a travel calendar, housing evidence and the location of both work and family.

A treaty may resolve competing residence claims, but only if the person and income fall within that treaty. An Andorran address does not by itself end residence in the departure country.

The 10% rate, allowances and general-income credit

IRPF separates general income, including employment, business activity and rental income, from savings income. The ordinary rate is 10%, but the bases, exemptions and reductions are different. The general personal reduction is EUR 24,000. Qualifying general income also receives a 50% tax reduction capped at EUR 800; this explains the familiar 5% description for the band between EUR 24,000 and EUR 40,000.

The EUR 3,000 savings reduction is separate. It is not an additional EUR 3,000 deduction from wages. Family, disability, housing and pension provisions can alter a real calculation; a table of headline rates is not an employee payslip.

Salary: contributions are separate from income tax

For ordinary insured employment, the employee pays 6.5% of the contribution base and the employer pays 15.5%. The employee split is 3% for the general branch and 3.5% for retirement; the employer split is 7% and 8.5%. The base includes the remuneration items specified by CASS, rather than simply the cash transferred to a bank account.

On EUR 100,000 that is entirely within the ordinary contribution base, employee CASS is EUR 6,500 and employer CASS EUR 15,500. Salary plus those employer contributions is EUR 115,500 before other employment costs. This example stops before IRPF: deductible employee contributions and personal circumstances affect the tax base.

The cited ordinary salary rules do not establish a universal upper earnings ceiling. Self-employed owners use separate contribution bases linked to prior average wages and their circumstances; applying the 6.5% employee rate to an owner-manager would be misleading.

Asset cost basis on arrival

Ordinary acquisition-value rules are identified, but no universal personal immigration-date step-up has been established. Corporate incoming-asset and 2014 financial-asset provisions must not be generalized.

Keep the original purchase cost and an arrival valuation; the valuation alone does not establish a new deductible basis.

Current law reviewed 14 October 2026; no claim of a universal personal step-up.

Shares, property and other gains need separate tests

Andorra taxes gains unless an exemption applies. The share exemption considers the ownership percentage during the preceding twelve months, including connected family holdings. A holding that has not exceeded 25% can qualify; a larger holding can qualify after the specified ten-year holding period. The exemption is restricted for entities whose assets consist to the statutory extent of Andorran real estate.

The law also provides a ten-year ownership exemption for qualifying foreign real estate. An Andorran home, a foreign rental property, fund units and a privately held operating company should not be placed in the same “capital gains tax: zero” row. Trading or business use can introduce another set of questions.

Older government summaries still refer to a separate real-estate gains tax. The current IRPF text and the direct-tax reforms govern the modern analysis; the older explanatory sentence is not a reliable basis for an imminent sale.

What happens to an asset’s cost when you move

Articles 25 and 26 calculate ordinary gains by comparing disposal value with the legally determined acquisition value. For a purchased asset this starts with the acquisition price and eligible associated costs, with adjustments such as improvements and depreciation where relevant. A valuation made on arrival does not, on its own, substitute for those rules.

This review has not established a universal personal immigration-date step-up. The special historical revaluation of certain financial assets at 31 December 2014 is a commencement provision, not a benefit triggered by a later move. The corporate law has an express rule for certain incoming fixed assets; that company rule must not be transplanted into an individual portfolio.

Keep original purchase and reorganisation records alongside an arrival valuation and any foreign departure-tax assessment. For a large pre-arrival gain, the useful question is whether the particular asset, acquisition method and treaty produce a different basis—not simply whether Andorra has a low rate.

Foreign companies can create current personal tax

Article 29 bis contains international fiscal-transparency rules. Broadly, it examines control exceeding 50%, including specified connected persons, and foreign taxation below half the corresponding Andorran burden. The income categories, actual economic activity and statutory exclusions determine what is attributed.

This can tax qualifying income before a dividend is paid. A foreign company retained after relocation needs a review of ownership, accounts, actual foreign tax and activities. The absence of a cash distribution is not enough. A separate issue is whether decisions made in Andorra cause the company itself to become Andorran-resident.

Indirect taxes and property costs

The standard IGI rate is 4.5%, with 0%, 1%, 2.5% and 9.5% categories. Eligibility attaches to the supply, not to the customer’s status as a new resident. Financial services, healthcare, education, housing and imports require their own classification.

Purchasing real estate can involve transaction costs and foreign-investment rules in addition to annual income taxation. Law 2/2026 also changes the foreign-property-investment framework. Do not treat a residence investment requirement as the complete purchase budget.

Filing, foreign tax and departure

The published IRPF filing window is 1 April to 30 September following the income year. The authority identifies business income, specified levels of wages or rents, unwithheld investment income and gains as filing triggers. An employer withholding tax does not automatically settle a portfolio or foreign-business return.

Foreign tax relief requires proof and the applicable domestic/treaty limitation. On losing resident status, the law accelerates certain income still pending inclusion into the final resident return. That is different from asserting that every private asset is deemed sold, but it also prevents a blanket “no exit consequences” promise.

Before arrival or departure, reconcile the residence date, unpaid earnings, deferred income, investment disposals and company management. Our international planning work can connect that analysis with the banking, company and relocation steps that depend on it.