Taxes in Andorra 2026: what you really pay (income tax, corporate tax, IGI and property)

Andorra has one of the lowest tax burdens in Europe without being a tax haven: it is a compliant country, with double-taxation treaties and banking transparency. Here is the full picture of what you pay — and what you don't — in the Principality.

Income tax: 10% at most

Personal income tax works in very simple brackets:

• Up to €24,000 a year: 0%.
• From €24,000 to €40,000: 5%.
• Above €40,000: 10%.

To put it in context: a high salary that in Spain would be taxed above 45% in its top bracket never exceeds 10% in Andorra. Dividends from Andorran companies are also exempt for the resident.

Corporate tax: between 2% and 10%

The general rate is 10%, already one of the lowest in Europe. Small new companies enjoy reductions (5% on the first €50,000 in certain cases), and some special regimes can push the effective rate even lower.

IGI: the Andorran "VAT", at 4.5%

The Impost General Indirecte is the equivalent of VAT, with a general rate of 4.5% (versus 21% in Spain or 20% in France). There are reduced rates for healthcare, education or food, and an increased 9.5% rate for banking services.

What you do NOT pay in Andorra

• Wealth tax: does not exist.
• Inheritance and gift tax: does not exist.
• Social security contributions far lower than in neighbouring countries.

Property taxation

If your interest is real estate, these are the taxes that affect you:

• When buying: property transfer tax (ITP) of 4-4.5%, split between the Government and the parish. Non-residents must also account for the foreign real-estate investment tax (3% to 10% depending on the amount, with reductions if the property is destined for primary-residence rental).
• When selling: capital gains tax on property, with rates starting at 15% if you sell in the first year and decreasing progressively each year of ownership until disappearing from the tenth year onward.
• Every year: the "foc i lloc" and communal taxes, which rarely exceed a few hundred euros. There is no property tax comparable to Spain's IBI.

And tax residency?

To be taxed in Andorra you must be a tax resident: more than 183 days a year in the country, or having your centre of economic interests here. Simply registering is not enough — neighbouring tax authorities scrutinise this closely, so the move must be done properly.

Conclusion

Between 0 and 10% income tax, 10% corporate tax, 4.5% VAT and zero wealth or inheritance tax, the tax saving of settling in Andorra is enormous and entirely legal. The key step is usually the same: securing your home, a requirement for any residency. At Casas Andorra we help you find it and coordinate everything else with specialised tax advisors. Let's talk.

Note: this article is informational and does not constitute tax advice. Rates and regulations may change; always check your case with a licensed professional.