In France, VAT applies at the standard rate of 20%. In Andorra, it does not exist: the Principality levies a general indirect tax, the IGI, whose general rate is 4.5% in 2026. Another major difference is that the country lies outside the European tax territory: no transaction with a member state falls under the intra-Community regime. Here is how this tax works, what its rates are and how to invoice your transactions with the Principality.
Key points
- Andorra does not apply VAT but a general indirect tax (IGI), in force since 1 January 2013;
- it stands at 4.5% in 2026 in the general case, compared with 20% in France;
- the Principality forms a customs union with the EU for industrial products, but remains a third country in tax terms;
- an Andorran company has no intra-Community identification number: it is identified by its tax registry number (NRT);
- on the return journey, a traveller aged 15 and over benefits from a 900 euro allowance on their purchases, of which a maximum of 300 euros may be foodstuffs.
Is there VAT in Andorra?
No, not in the sense of European law. The Principality applies a tax that works in the same way, the general indirect tax, often loosely referred to as "Andorran VAT".
IGI: the local equivalent of VAT since 2013
The general indirect tax (impost general indirecte) was established by Llei 11/2012 of 21 June 2012, published in the BOPA (Butlletí Oficial del Principat d'Andorra, the Andorran official gazette), and has applied since 1 January 2013. It replaced several taxes that were levied separately on goods and on certain services. Its mechanism is that of a value added tax: it applies to supplies of goods, services and imports carried out within the territory, at each stage of the chain. In practice, each business charges the tax to its buyer, deducts the tax paid on its own purchases and remits the difference. Only the final consumer bears the burden.
Who collects IGI: businesses and professionals established locally
Liable persons are companies and professionals carrying out an economic activity in the Principality, whether through a company or in their own name. They charge the tax on their sales and declare it to the Departament de Tributs i de Fronteres, the Andorran tax and customs authority. On imports, it is settled directly at customs. Where VAT is the French State's main source of revenue, the country has opted for a moderate consumption tax, consistent with direct taxation capped at 10% for both personal income tax and corporate income tax.
What are the IGI rates in Andorra in 2026?
In 2026, Llei 11/2012 provides for six rates: 0%, 1%, 2.5%, 3.5%, 4.5% and 9.5%. The standard rate of 4.5% applies by default to any good or service that does not fall within a specific category.
| 2026 scale | Category | Main transactions concerned |
|---|---|---|
| 0% | Zero | Notably healthcare and education |
| 1% | Reduced | Notably food products, water, books, press |
| 2.5% | Special | Notably passenger transport, certain cultural services, works of art and collectors' items |
| 3.5% | Specific | Acquisition of a property intended for permanent residential letting, minimum lease of five years |
| 4.5% | Standard | Most goods and services: clothing, electronics, catering, vehicles |
| 9.5% | Increased | Banking and financial activities |
2026 rate schedule
Six IGI rates against French VAT
Source: Llei 11/2012 on the general indirect tax. Rates in force in 2026.
The increased rate is a local specificity. In France, most banking and financial transactions are exempt under article 261 C of the Code général des impôts (CGI); the Principality, by contrast, taxes them at 9.5%, more than double the standard rate.
Calculating IGI: from net of tax to tax inclusive
To obtain a tax-inclusive price, multiply the net-of-tax price by 1.045 in the standard case, or by 1.01 for goods at 1%; to work back to the net-of-tax price, divide by the same coefficient. Example: a service invoiced at 2,000 euros net of tax bears 90 euros of tax, giving 2,090 euros in total. Note: applying 4.5% to the tax-inclusive price in order to isolate the tax overstates the amount.
Indicative calculation based on the IGI rates in force in 2026.
Gap with France: 15.5 points in the standard case
On a purchase of 1,000 euros net of tax, the gap reaches 155 euros: 200 euros of tax on the French side, 45 euros on the Andorran side. It explains the appeal of the Principality's retailers, within the limits of the allowances applicable on return.
Andorra and the European Union VAT territory: a third country
For tax purposes, Andorra is a third country, in the same way as Switzerland or the United Kingdom. This classification governs the entire treatment of trade flows, even though customs ties are often a source of confusion.
Customs union since 1991: industrial products only
The Principality and the European Economic Community concluded a customs agreement on 28 June 1990, which entered into force on 1 July 1991. It covers only industrial products, classified under chapters 25 to 97 of the harmonised commodity description system; agricultural products (chapters 1 to 24) fall under a separate preferential regime. In practical terms, an industrial product crosses the border free of customs duty, but the formalities remain. The agreement concerns duties, not consumption tax: crossing the border is still an import and an export.
VAT territory: the Principality excluded, Monaco treated as France
Article 256-0 of the CGI defines the geographical scope of the tax and excludes several zones from it. The administrative doctrine (BOI-TVA-CHAMP-20-10) places Andorra, along with San Marino and Turkey, among the third countries linked to Europe by a customs agreement. Monaco follows the opposite logic: the Monegasque principality is treated as France. Other zones belong to a Member State without falling within the European scope of the tax, such as the Canary Islands, the French overseas departments or the French part of Saint Martin.
| Zone | Affiliation | Tax status |
|---|---|---|
| Monaco | European customs area | Treated as France |
| Andorra | Customs union (industrial products) | Third country |
| San Marino | Customs union | Third country |
| Canary Islands | Spain, Member State | Excluded |
| Guadeloupe, Martinique, La Réunion | France, Member State | Excluded |
| Channel Islands | British Crown dependencies | Third country |
VAT territory
Where the border runs for European VAT
Source: article 256-0 of the CGI and BOI-TVA-CHAMP-20-10.
No intra-Community identification number: the Andorran NRT
An Andorran company does not have an intra-Community VAT number. It is identified by its tax register number (número de registre tributari, NRT), which does not appear in VIES, the European verification database, as that database lists only taxable persons in Member States. For a French supplier, the NRT serves to identify the client on the invoice, not to give entitlement to the intra-Community supply regime.
Key points
A customs union does not mean a VAT territory. Andorra pays no customs duties on industrial products, but every flow of goods with France remains an export or an import, never an intra-Community supply.
How does trade between Andorra and the European Union work?
Because the Principality is a third country, flows of goods fall under the export and import regime, never under that of intra-Community supplies. For services, the place-of-supply rule determines who taxes the transaction.
Trade between France and Andorra
Who taxes which flow?
2026 rules between businesses. The arrows indicate the direction of the supply of goods or services.
Selling goods to an Andorran customer: an exempt export
A French company that ships goods to the Principality invoices excluding tax: its sales are exempt exports under article 262 I of the CGI, whether the buyer is a business or a private individual. The exemption requires proof that the goods have left the EU, in practice the export declaration validated by customs. The invoice states the exemption and its legal basis. On arrival, the buyer pays IGI on importation.
Buying goods from an Andorran supplier: an import taxed in France
Conversely, a French company that buys goods from an Andorran supplier carries out an import. Since 1 January 2022, import VAT is compulsorily reverse-charged on the importer's return, where it is deducted at the same time. The customs union removes duties on industrial products, not the formalities: the importer must hold an EORI number, the customs identifier for economic operators.
Supplies of services: the place-of-customer rule
Between businesses, a service is taxable where the customer is established (article 259 of the CGI). A French supplier invoicing an Andorran company therefore charges no VAT and includes the statement "VAT not applicable, article 259-1 of the CGI". In the other direction, the French customer reverse-charges the tax (article 283-2 of the CGI). For a private individual, French tax remains due in principle, except for certain intangible services, such as consultancy or advertising, supplied to a person established outside the EU (article 259 B of the CGI).
| Transaction (2026) | French side | Andorran side |
|---|---|---|
| Sale of goods by a French company to an Andorran buyer | Exempt export (art. 262 I of the CGI) | Tax settled at customs |
| Purchase of goods by a French company from an Andorran supplier | Import, tax self-assessed | Exempt export |
| Supply of services by a French company to an Andorran company | Not taxable (art. 259 of the CGI) | In principle, self-assessment by the recipient |
| Supply of services by an Andorran company to a French company | Self-assessment by the recipient (art. 283-2 of the CGI) | In principle, no IGI |
| Supply by a French company to an Andorran individual | French tax, except art. 259 B of the CGI | In principle, no IGI |
| On-site purchase by a French individual | Taxes due above the 900 € allowance | Tax included in the price |
Worked example: a 10,000 euro sale of goods
Assumptions: a French company sells 10,000 euros of industrial equipment, excluding tax, to a company established in Andorra.
- French side: the invoice amounts to 10,000 euros, tax free, as an export;
- Andorran side: the buyer pays 450 euros of IGI at customs (10,000 × 4.5 %), which may be deducted if the buyer is liable for the tax;
- no customs duty is due, since the equipment falls within the industrial products covered by the customs union.
If the same buyer were established in Spain, the sale would be an exempt intra-Community supply, subject to a valid tax identification number, and the buyer would self-assess 2,100 euros of Spanish tax at the 21 % rate. Where your business operates on both sides of the border, our experts coordinate the treatment of these flows with your French chartered accountant.
Example
Same sale, two clients: Andorra or Spain
Sale of 10,000 euros of industrial equipment, excluding tax, by a French company. 2026 rates.
What reporting obligations apply to a company established in the country?
A company established in the Principality that carries out taxable transactions must collect the tax, report it periodically and remit it to the Departament de Tributs i de Fronteres. These obligations come in addition to those set out in our guide to corporate income tax in Andorra.
Registration: an NRT and registration as a taxable person
Registration in the tax register takes place as soon as the company is incorporated in Andorra or the professional activity begins. The company then receives its NRT, which appears on its invoices and returns. In principle, a person whose supplies of goods and services do not exceed 40,000 euros per year does not qualify as a taxable person, under the implementing regulation of Llei 11/2012.
Returns: half-yearly, quarterly or monthly depending on turnover
| Previous year's turnover | Frequency |
|---|---|
| Less than €250,000 | Half-yearly |
| From €250,000 to €3,600,000 | Quarterly |
| More than €3,600,000 | Monthly |
Each return sets off the tax collected on sales against the deductible tax on purchases and imports. A positive balance is remitted, a negative balance may be carried forward or refunded.
Invoicing: NRT, rate and amount
An Andorran invoice states the NRT of the issuer, that of the business purchaser, the tax-exclusive base, the rate and the amount of the tax. For a purchaser established in a Member State, it indicates the reason for non-application, for example an exempt export.
Individuals: purchases, allowances and tax refunds
An individual making purchases in the Principality pays the local tax included in the displayed price. On the return journey, those purchases remain exempt only within the limits of the customs allowances specific to Andorra.
Return to France: an allowance of 900 euros per traveller aged 15 and over
The agreement of 28 June 1990 sets out a specific allowance regime, more favourable than ordinary law. In 2026, a traveller aged 15 or over may bring back goods worth 900 euros free of duty and tax, of which no more than 300 euros may be foodstuffs. These amounts are reduced to 450 euros and 150 euros for a traveller under 15. Tobacco and alcohol are subject to quantity limits, reserved for travellers aged 17 and over: 300 cigarettes, 1.5 litres of spirits above 22 degrees or 5 litres of still wine, in particular. Beyond these thresholds, purchases must be declared to customs and any taxes and duties are payable on their total value, not solely on the amount in excess.
Andorran resident: tax-free shopping in France
Conversely, an Andorran resident shopping on the other side of the border may benefit from tax-free sales, reserved for travellers whose habitual residence lies outside the EU. Reimbursement requires a minimum purchase amount in a single shop and the removal of the goods within three months, validated by customs when crossing the border.
Common VAT errors involving the Principality
Most invoicing errors stem from a single misunderstanding: treating the Principality as a Member State. The most costly errors to avoid:
- invoicing an Andorran client under the intra-Community reverse charge, when the sale of goods is an export and the supply of services an operation not taxable in France;
- searching for an Andorran company's number in VIES, where it does not appear;
- failing to keep proof that the goods have left the territory, without which the exemption may be challenged;
- confusing the customs agreement with the tax scope: the absence of duties on industrial products exempts neither from import tax nor from customs clearance formalities.
Frequently asked questions about VAT in Andorra
Is Andorra part of the European Union?
No. The Principality is not a Member State: it is linked to the EU by a customs agreement limited to industrial products, but remains a third country for tax purposes.
Should VAT be charged to an Andorran client?
No, in most cases. A sale of goods shipped to the Principality is an exempt export, and a service supplied to an Andorran company is not taxable in France. Only certain services supplied to a private individual remain taxed on the French side.
Are Monaco and Andorra treated in the same way?
No. Monaco is treated as part of France, so that a sale to Monaco is taxed as a domestic sale. Andorra is a third country: flows fall under the rules governing exports and imports.
Is a purchase made in the Principality taxed on return?
Yes, above the allowance. A traveller aged 15 or over may bring back goods worth 900 euros free of tax and duty, of which no more than 300 euros may be foodstuffs; beyond that, any taxes and duties are payable on the total value of the purchases.
