In France, income tax reaches 45% on the highest bracket, before social security contributions, and corporate tax stands at 25%. In Andorra, the IRPF is capped at 10%, as is the IS, and the Principality has neither wealth tax nor inheritance duties. Contrary to a widespread belief, Andorra is not, however, a tax-free country: it has a complete tax system, built over the course of a few years. Here is the list of Andorran taxes in 2026, those affecting individuals, businesses and real estate, a worked example, the question of the tax haven and the conditions for benefiting from it.
Key points
- income tax (IRPF): 0% up to 24,000 euros of income, 10% maximum;
- corporate tax: 10% of profit;
- general indirect tax (IGI), the equivalent of VAT: 4.5% at the standard rate;
- no wealth tax, no inheritance or gift tax;
- real estate capital gains taxed on a sliding scale that decreases with the holding period;
- these rules apply only to persons with tax residence in the Principality.
What taxes do you pay in Andorra?
Andorra today levies direct taxes on income and profits, an indirect tax on consumption and several charges on real estate. This framework is recent: for the most part, it was created between 2010 and 2015, in line with the transparency commitments the Principality made to the European Union and the OECD.
| Tax | Taxpayers concerned | Rate in Andorra (2026) | Equivalent in France |
|---|---|---|---|
| Income tax (IRPF) | Tax residents | 0% to 10% | 0% to 45%, plus social charges |
| Corporate tax (IS) | Andorran companies | 10% | 25% |
| General indirect tax (IGI) | Consumers | 4.5% at the standard rate | VAT of 20% at the standard rate |
| Non-resident income tax (IRNR) | Non-residents with Andorran income | 10% as a general rule | Non-resident income tax |
| Wealth tax | None | 0% | Real estate wealth tax |
| Inheritance and gift duties | None | 0% | Up to 45% in direct line |
A recent tax system: taxes created between 2010 and 2015
Until the late 2000s, Andorra taxed neither company profits nor individuals' income. The IS and IRNR date from 2010, the IGI from 2012 and the IRPF from 2014, applied as of 2015. Each charge rests on a law passed by the Consell General, the Andorran parliament, and published in the Butlletí Oficial del Principat d'Andorra (BOPA).
Residents, non-residents, companies: three distinct regimes
A person with tax residence in Andorra is subject to the IRPF on their worldwide income. The non-resident is taxed, through the IRNR, only on their income of Andorran source, such as rent from a property located in the Principality. Andorran companies fall under the IS, and any economic activity collects the IGI.
The taxes of resident individuals in Andorra
An Andorran tax resident pays the IRPF and, if they work, social security contributions. Their taxation stands out as much for what it taxes as for what it spares: wealth and its transmission.
IRPF: from 0% to 10% depending on income
Personal income tax (IRPF), governed by Llei 5/2014, applies at the rate of 10%, after a tax-free personal minimum of 24,000 euros and a 50% reduction up to 40,000 euros. In practice, taxation amounts to 0% up to 24,000 euros, 5% between 24,000 and 40,000 euros, then 10% beyond. The return is filed once a year with the Departament de Tributs i de Fronteres.
Income from assets: 10%, capital gains on shares exempt subject to conditions
Income from savings (dividends, interest, capital gains) is taxed at 10%, after an annual allowance of 3,000 euros. Capital gains on shares are exempt when the holding does not exceed 25% of the company's capital. Good news for investors: dividends paid by an Andorran company subject to corporate income tax are exempt in the hands of the recipient.
No wealth tax and no inheritance tax
Andorra levies no tax on wealth held, nor any inheritance or gift tax. One caveat, however: the absence of an Andorran tax does not neutralise French taxation. An estate remains taxable on the French side when the heir has been domiciled there for at least six of the last ten years, or when the transferred assets are located on French territory. The rules and transfer strategies are set out in our analysis of inheritance in Andorra.
Social security contributions: the CASS
Employees contribute to the CASS (Caixa Andorrana de Seguretat Social) at a rate of 6.5% of their gross salary, and the employer at a rate of 15.5%. Self-employed workers contribute on a flat-rate basis set each year according to the average salary. These contributions give entitlement to Andorran health insurance and pension coverage, and they are deductible from the IRPF base.
Business taxes in Andorra
A company established in Andorra is subject mainly to two levies: corporate income tax on its profit and the IGI on its turnover, which it collects on behalf of the State. For entrepreneurs structuring their assets, the holding company regime completes this framework.
Corporate income tax: 10% on profit
Corporate income tax (impost sobre societats), created by Llei 95/2010, applies to the adjusted accounting profit at a rate of 10%. Losses may be carried forward to subsequent financial years, and an instalment is paid during the year based on the previous year's tax. The only addition is the communal taxes on carrying out a commercial or professional activity, of a moderate amount. One condition is nonetheless essential: the company must have genuine substance in Andorra, with effective management and resources suited to its activity.
IGI: Andorran VAT at 4.5%
The general indirect tax (impost general indirecte), governed by Llei 11/2012, works like a VAT: the company charges it to its customers, deducts the tax it has paid on its purchases and remits the difference. Its general rate is 4.5%, with variants at 0%, 1% (reduced), 2.5% (special), 3.5% (specific) and 9.5% (increased) for banking and financial services. Exports of goods are exempt from it.
Holding company: dividends and capital gains on holdings exempt under conditions
An Andorran holding company may receive dividends and dispose of holdings without taxation, where the holding amounts to at least 5% of the subsidiary's capital and has been held for at least one year. This exemption regime makes it possible to move up a group's profits and reinvest the proceeds of a disposal without intermediate taxation. For a French entrepreneur, however, it operates alongside the French anti-abuse rules: the holding company must carry out a genuine activity and not serve as a mere shell.
Real estate: taxes on purchase, ownership and resale
Real estate is the area where Andorran taxation is most present, with taxation at each stage: on acquisition, during ownership for the benefit of the comuns (the Andorran municipalities), and on resale on the capital gain realised.
Purchase: 4% transfer tax or 4.5% IGI
The acquisition of a property from a private individual is subject to the tax on immovable property transfers (impost sobre transmissions patrimonials immobiliàries) at a rate of 4%, payable by the buyer (1% for the State and a communal share of up to 3% depending on the parish). When the seller is a professional, typically a developer for a new dwelling, the transaction falls under the IGI at 4.5%. Another particularity: a non-resident foreign buyer must obtain a foreign investment authorisation from the Government before signing.
Resale: a capital gain that decreases with the length of ownership
Capital gains realized on the resale of a property by an individual are taxed under income tax, at a rate of 10%. This rate does not depend on the seller's place of residence, but solely on the holding period: it remains at 10% up to six years of ownership, then decreases (around 8% between six and seven years, 6% between seven and eight years, 4% between eight and nine years, 2% between nine and ten years), and the capital gain is fully exempt beyond ten years of ownership. For a company, real estate capital gains fall under corporate income tax, at a rate of 10%.
Ownership: moderate municipal taxes
Each parish sets its own local taxation, the burden of which remains low compared with the French property tax: the tax on real estate property, the "foc i lloc" tax owed by the occupants of a dwelling, and the tax on rental income. An owner domiciled outside Andorra who rents out their property additionally pays the IRNR on the rents received.
A worked example: an employee earning 100,000 euros in Andorra and in France
An example makes it possible to measure the real difference in levies between the two countries, including social security contributions. By way of illustration, let us take a single employee, with no children, who earns 100,000 euros in gross annual salary in 2026.
In Andorra:
- employee CASS contribution: 100,000 × 6.5% = 6,500 euros;
- IRPF base: 100,000 − 6,500 = 93,500 euros;
- amount before reduction: (93,500 − 24,000) × 10% = 6,950 euros;
- 50% reduction on the band from 24,000 to 40,000 euros: 16,000 × 10% × 50% = 800 euros;
- IRPF due: 6,950 − 800 = 6,150 euros;
- total levies: 6,500 + 6,150 = 12,650 euros.
In France, under simplified assumptions: employee contributions of 22,000 euros (22% of gross), net taxable income of 80,000 euros, a standard 10% allowance bringing the taxable base down to 72,000 euros, income tax scale applicable in 2026:
- 11% band: (29,579 − 11,600) × 11% = 1,978 euros;
- 30% band: (72,000 − 29,579) × 30% = 12,726 euros;
- income tax amount: 14,704 euros;
- total levies: 22,000 + 14,704 = 36,704 euros.
| Item | Andorra | France |
|---|---|---|
| Employee social security contributions | 6 500 € | 22 000 € |
| Income tax | 6 150 € | 14 704 € |
| Total levies | 12 650 € | 36 704 € |
| Disposable income | 87 350 € | 63 296 € |
The difference exceeds 24,000 euros per year. It widens with the level of remuneration, since the Andorran marginal rate remains capped at 10% while the French scale climbs up to 45%. To test your own situation, our France Andorra tax simulator compares the two countries based on your figures.
Is Andorra still a tax haven?
No: Andorra no longer appears on the OECD list of non-cooperative tax havens, and the Global Forum on Transparency counts it among the jurisdictions compliant with international standards. Its taxation remains low, but it now rests on a complete body of tax law and on the exchange of information with other countries.
Removal from the blacklists: a turning point begun in 2009
The tax haven image dates from a time when Andorra levied no direct taxation on income or profits and maintained strict banking secrecy. In 2009, under pressure from the OECD, the Principality committed to adopting transparency standards and signed its first tax information exchange agreements, before creating its direct taxation. The OECD removed it from its blacklist in May 2009, then from its grey list in February 2010; Spain removed it from its own list in November 2010. Contrary to a still widespread belief, an Andorran taxpayer therefore benefits from no opacity: they benefit from low taxation, within a framework recognised by their neighbours.
Timeline: from the blacklist to transparency
- 2009Commitment to the OECD to adopt transparency standards; removal from the blacklist in May.
- February 2010Removal from the OECD grey list.
- 2010Introduction of corporate income tax and the IRNR; Spain removes Andorra from its list in November.
- 2012Introduction of the IGI, the equivalent of VAT.
- 2014Introduction of the IRPF, applied as from 2015.
- 2016Law 19/2016 on the automatic exchange of financial information.
- 2018First automatic exchange with foreign administrations.
Automatic exchange and treaties: low but transparent taxation
Since Law 19/2016 came into force, Andorra collects information on financial accounts held by persons domiciled abroad and transmits it each year to the tax authorities of their country, in accordance with the OECD's Common Reporting Standard, with a first exchange in 2018. It has signed tax treaties with its French and Spanish neighbours, Portugal and Luxembourg, which govern the allocation of taxing rights and mutual assistance between authorities. In practical terms, a French national who settles in Andorra must assume that the French authorities are aware of their Andorran accounts: the tax advantage rests on effective residence, not on confidentiality.
Benefiting from Andorran taxation: residence and the treaty with France
The Andorran rates apply only to a person who has genuinely transferred their tax residence to the Principality. For a French taxpayer, this transfer is assessed with regard to Andorran law, French law and the tax treaty binding the two countries alike.
Tax residence: 183 days or centre of economic interests
A person is a tax resident of Andorra if they spend more than 183 days there during the calendar year, or if they have established the main centre of their activities or economic interests there. Residence is also presumed where the spouse and dependent minor children live there. This tax residence first requires a residence permit, active if you carry on an activity in Andorra, passive if you live off your income or assets. The criteria and the evidence to be gathered are set out in detail in our guide to tax residence in Andorra.
The France–Andorra treaty: avoiding double taxation
The tax treaty signed between France and Andorra on 2 April 2013, which came into force on 1 July 2015, settles situations where both countries claim the same taxpayer and allocates the right to tax each category of income. Private-sector retirement pensions and capital gains on shares are in principle taxable in the State of residence, while real estate income remains taxable where the property is located. How each article operates is explained in our analysis of the tax treaty between France and Andorra.
Leaving France: anticipating the exit tax
A taxpayer who holds securities worth more than 800 000 euros, or at least 50% of a company's profits, and who has been tax-domiciled on French soil for six of the preceding ten years, is subject to the exit tax on their latent capital gains at the time of departure. This is the first point our experts examine with entrepreneurs: at Engage, we coordinate the Andorran residence file with the French tax specialists responsible for securing the departure and proving the break with the country of departure.
Frequently asked questions about taxes in Andorra
Are there taxes in Andorra?
Yes. Andorra levies an income tax, a corporate tax, the IGI on consumption and several property taxes. It does not, however, have a wealth tax or inheritance tax.
What is the maximum tax rate in Andorra?
10% on personal income and on company profits. The capital gain on real estate is also capped at 10%, with this rate decreasing according to the holding period until a full exemption beyond ten years.
Does a non-resident owner in Andorra pay taxes?
Yes. They pay the communal taxes attached to the property and, if they rent it out, the IRNR on the rental income, generally at a rate of 10%. The capital gain is taxed upon resale.
Are French pensions taxed in Andorra?
Private sector pensions are in principle taxable in Andorra, under the IRPF, when the retiree has their tax residence there. French public service pensions remain taxable in the State that pays them, in accordance with the tax treaty.
Is there a property tax in Andorra?
Yes, in the form of communal taxes set by each parish, including the tax on real estate property. Their amount remains low compared with the French property tax.
Are capital gains on shares taxed in Andorra?
No, when the holding does not exceed 25% of the company's capital. Above that, they are in principle taxed at 10% within the savings base.
