A Guide to Taxes in Andorra
Updated: Aug 20
Andorra offers a genuinely tax advantageous position for its residents built on a fairly simple tax structure compared to most of Western Europe. Understanding taxes in Andorra — what to pay, and when — isn't complicated, although in practice you'll likely want an accountant to handle the actual filing for you. Wondering what personal taxes apply in Andorra, what company taxes exist, what your personal finance structure might look like as an Andorran resident, or simply what the current Andorra tax rates are? Read on for the full breakdown.
What Taxes to Pay as an Individual in Andorra?
Before looking at company obligations, it's worth starting with the taxes that apply to you personally as a resident — the day-to-day rates you'll actually encounter as an individual living in Andorra.
a) IGI (VAT)
IGI is Andorra's equivalent of VAT. Rates on purchases in Andorra range from 0% up to 9.5%, depending on the category:
4.5%: the general rate, applied to most goods and services
0%: public services such as healthcare, rent, and the sale of secondhand property and cars
1%: a limited category of products, excluding meat, plant-based food, water and books
2,5% Transportation, education and art dealings
9,5% bank fees and charges
Reclaiming IGI outside Andorra:
As an Andorran resident, you're entitled to buy VAT-free when shopping in Europe or elsewhere. To do this, you must purchase in person at a physical store outside Andorra — online purchases don't qualify unless the retailer is set up to import the goods into Andorra on your behalf. When buying in person abroad, you'll be issued a tax-free document, which you then process either through the relevant tax-free company or your bank. The VAT paid is refunded to your Andorran account, typically with some delay. You're exempt from paying IGI on importation if the item is valued under €900.
b) IRPF
IRPF is Andorra's personal income tax, and it works on a simple three-tier system:
0% on the first €24,000 of annual income
5% on income between €24,000 and €40,000
10% on any income above €40,000
If you're employed, your HR department will handle the timing and process for you. If you run your own business, an accountant will typically include your IRPF declaration as part of their annual service.
c) Capital gains
Capital gains tax in Andorra is most relevant to property sales, since this is the transaction the tax office scrutinises most closely. The rate runs on a sliding scale, starting at 15% and reducing to 0% after 15 years of ownership. This tax is paid via the notary at the point of sale. For a full breakdown, see our dedicated guide: Capital Gains Tax on Property in Andorra.
d) ITP
ITP — Andorra's patrimonial transaction tax, broadly equivalent to stamp duty — currently stands at 4%. It's paid via the notary at the point of purchase. We cover this in more detail in our Guide to Buying Property in Andorra.
e) Vehicle tax
A modest annual tax based on a vehicle's horsepower, ranging from €52 to €169.50 per year. This is deducted directly from your bank account by the government.
f) Foc i lloc communal tax
Charmingly named the "fire and home" tax, Foc i Lloc functions as a residency tax for anyone living in Andorra. The amount depends on your parish: €30–35 a year in most parishes, rising to over €50 a year per person in Sant Julià de Lòria. This is collected directly by your local parish.
g) Rental tax
This applies to owners of rental property in Andorra. The rate varies by parish, ranging from 1.75% to 4%. In Andorra la Vella and Escaldes-Engordany specifically, an additional 1% applies to rental income above €40,000 per year. This tax is deducted directly by the local parish.
h) Property owner tax
Anyone who owns property whether principal or secondary must pay the property owner tax in Andorra. The rate is based on m2 and stands between €0.52 and €0.65/m2 in all parishes apart from Andorra la Vella. Andorra la Vella instead has different thresholds depending on the total size of the property that go from €0.32/m2 up to €1.28/m2. This tax is deducted from your bank account by the local parish.
What Taxes to Pay as a Company in Andorra?
Beyond personal taxation, anyone running a business in Andorra — whether as a sole trader, a limited company, or a larger corporation — also needs to understand the country's company-side tax obligations, which are just as straightforward as the personal system, but come with their own set of rules.
a) IS (corporate tax)
Andorran corporate tax sits at a flat 10% on profits, with no thresholds or tiers. The IS declaration is typically handled annually by an accountant, and must be filed within the first six months of the following fiscal year. Andorra's fiscal year runs from 1 January to 31 December.
b) IGI
Any purchase or invoice issued in a business context must include IGI from the outset. This applies even to B2B transactions within Andorra — unlike the EU, where business-to-business invoices are typically VAT-exempt. Depending on your business's turnover and profit level, your IGI declaration will need to be filed monthly, quarterly, or twice yearly, usually with an accountant's help.
c) Commercial tax
A flat commercial tax applies both when you open a company and annually thereafter, with the rate depending on the type of entity — limited company, private corporation, or general commercial activity. Rates start at €220.00 for basic commercial activity and rise to €900 for private corporations. This is typically deducted directly from your account by the government each year.
What Taxes to Pay as a Non Resident in Andorra?
Non-residents — whether earning income from Andorran sources, owning property here, or investing without living in the country full-time — face a somewhat different tax picture from residents. The key differences to be aware of:
a) IRNR (non resident IRPF)
Rather than IRPF, non-residents pay IRNR, a flat 10% rate on income earned from Andorran sources, regardless of the amount. Unlike residents, who are taxed on worldwide income, non-residents are only taxed on what they earn within Andorra.
b) Foreign investment tax
Since the 2026 Omnibus law changes, buyers classified as foreign investors face an additional tax on top of the standard 4% ITP: 6% on a first property, rising to 10% from a second property onward. This classification isn't limited to non-residents in the simplest sense — it can also apply to Andorran residents who haven't been effectively resident in the country for at least 3 of the previous 10 years.
c) Rental income tax
Non-resident landlords are generally taxed on rental income at a flat rate, separate from the resident rental tax bands discussed above. It's worth confirming the current applicable rate with an accountant, as this is an area that has seen recent adjustment.
d) Capital gains tax on property
Non-residents selling property in Andorra remain subject to the capital gains tax which is also on a sliding scale much like for residents; but from 15% to a flat 10% figure after 2 years of ownership.
e) No wealth, inheritance, or gift tax
This applies equally to non-residents as to residents; Andorra doesn't levy any of these taxes on anyone, regardless of residency status.
Can I Do My Taxes Myself in Andorra?
Since most of the taxes above are deducted automatically from your bank account, there are really only three taxes an individual or company owner needs to actively manage:
IRPF, IS, and IGI.
It's entirely possible to file your own taxes in Andorra, but the main obstacle is language — all official tax declarations must be submitted in Catalan. Unlike in some countries, Andorra's tax office isn't set up as a public advice service, so working out exactly how, when, and where to file can be genuinely difficult without support. If you're determined and have the time to invest, it's certainly doable. That said, for anything beyond the simplest situation, we'd recommend working with a professional accountant rather than navigating it alone.
How Much Do Accountants Charge in Andorra?
Accountants in Andorra typically charge a minimum of €110–150 a month, with the fee scaling up alongside business activity and invoicing volume. It's not unusual to pay €200–250 a month for a more comprehensive service — particularly one offered in English, which tends to command a premium given the added convenience for foreign residents and business owners navigating taxes in Andorra for the first time.
