A French company selling into the Principality invoices without tax. An Andorran company shipping its goods to mainland France does not charge general indirect tax (IGI), the local equivalent of VAT. The tax does not disappear, however: it is collected on arrival, at 20% on the French side for most goods and at 4.5% on the Andorran side at the standard rate. Here is the framework linking the two territories, the rules applicable in each direction, a worked example, the case of services and online sales, and the points requiring attention for an Andorran company.
Key points
- the Principality lies outside the European VAT territory: no sale involving it falls under the intra-Community regime;
- the customs union concluded in 1990 removes border levies on industrial goods (chapters 25 to 97 of the harmonised system);
- export sales are exempt from IGI when leaving the Principality and from tax when leaving mainland France;
- the tax is due on arrival: 20% in mainland France, 4.5% in the Principality at the standard rate;
- Andorran companies state their tax identification number on their import and export documents.
Andorra and the European Union: what is the VAT border?
The Principality belongs neither to the Twenty-Seven nor to their VAT area, but together with them it forms a duty-free zone for industrial goods. This dual situation explains everything that follows: goods move duty-free, but the tax is treated as in a sale to the outside.
Outside the EU VAT territory: no intra-Community regime
For value added tax, the Principality lies outside the European scope, in the same way as the areas that Directive 2006/112/EC excludes, such as the Canary Islands or the Åland Islands. Contrary to a widespread idea, a sale between a French company and an Andorran company is therefore never an intra-Community supply: it is an export in one direction, a taxed entry in the other.
Customs union since 1990: zero duties on industrial goods
The agreement signed on 28 June 1990 with the European Community created a customs union limited to chapters 25 to 97 of the Harmonized System. For these goods, no duty or quota applies. Agricultural products, excluded from this agreement, benefit from preferential treatment when they are of Andorran origin.
The IGI, Andorran VAT: 4.5% at the general rate
The general indirect tax (impost general indirecte), created by law 11/2012, operates like a value added tax: it is charged at each stage and the tax paid upstream is deductible. It amounts to 4.5% in the general case. To this are added a 0% bracket (notably healthcare, education and medicines reimbursable by the Andorran social security fund), a 1% bracket (foodstuffs, water, books and publications), a 2.5% bracket (passenger transport, culture), a 3.5% bracket for the acquisition of housing intended for permanent residential rental, and a 9.5% bracket reserved for banking and financial services.
Exporting from Andorra to France or the European Union
An Andorran company that sells goods to a client established in France or elsewhere in Europe carries out an export sale exempt from IGI. The tax is then collected on entry, according to the schedule of the country of destination, while the levies at the border depend on the nature of the good.
IGI: export sales are exempt
Law 11/2012 exempts from IGI the supply of goods dispatched outside the Principality, provided that their departure is substantiated. The seller therefore collects no tax, while retaining the right to deduct the tax paid on its purchases: it is the recipient who bears the tax of their own country.
On arrival: import VAT at the rate of 20%
Goods entering French soil are subject to import tax, calculated on the customs value increased by the incidental costs up to the first place of destination. Good news for professionals: since 1 January 2022, it is compulsorily reverse-charged by taxable persons identified in France, pursuant to article 1695 of the General Tax Code. The client declares and deducts it simultaneously, with no cash advance.
Duties: zero for industrial goods, rules of origin for the rest
Chapters 25 to 97 move duty-free between the two territories. This rule also covers goods of third-country origin released for free circulation in the Principality, which applies the common European external tariff to its purchases of industrial goods. Agricultural products, on the other hand, enter duty-free only if they are Andorran, which must be proven by an EUR.1 certificate or a declaration of origin.
Formalities: tax number, declaration and the importer's EORI
Since 1 July 2017, Andorran companies must indicate their tax register number (número de registre tributari, NRT) on all documents relating to the trade of goods. Failing this, the administration may block the shipment. Each dispatch gives rise to an exit formality followed by an entry formality, filed by the recipient or their customs agent, who must hold an EORI identifier.
Selling from France to Andorra: a tax-free export
A French company delivering goods to the Principality carries out a sale outside the European area. It sells tax-free, provided it can substantiate the exit, and it is the Andorran recipient who pays the IGI on arrival.
Exemption: article 262 I of the CGI
Article 262 I of the Code général des impôts exempts supplies of goods dispatched or transported outside the European area, whether the transport is arranged by the seller or on their behalf, or by a buyer not established on French soil. A sale to a company or to an individual based in the Principality falls within this scope, provided the goods actually leave the territory. The seller retains their right of deduction on related purchases.
Supporting documents and mandatory statements
The exemption is only acquired if the exit is proven, by the electronic export document confirmed at the border post. Caution: without this supporting document, the tax authorities may claim the tax as for a local sale. The invoice bears the statement "Exonération de TVA, article 262 I du CGI", as well as the recipient's tax identifier when it is a company.
Statements and supporting documents to check
- Sale of goods to the Principality: "Exonération de TVA, article 262 I du CGI"
- Recipient's tax identifier when it is a company
- Electronic export document confirmed at the border post, to be kept
- Supply of services to an Andorran professional: "TVA non applicable, article 259 du CGI"
On entry into Andorra: the IGI for the recipient
The Andorran recipient pays the IGI on entry, at 4.5% for most goods, calculated on their customs value. For industrial goods, no duty is added.
| Direction of trade | Tax on departure | Customs duties | Tax on arrival | Liable party on arrival |
|---|---|---|---|---|
| Andorra to France | IGI exempt | 0% (chapters 25 to 97) | VAT of 20% | French customer (reverse charge if taxable) |
| France to Andorra | VAT exempt (art. 262 I of the CGI) | 0% (chapters 25 to 97) | IGI of 4.5% | Andorran customer |
Worked example: 10,000 euros of goods sold to a French company
An example makes it possible to follow the tax from one end of the transaction to the other. By way of illustration, let us take an Andorran company that sells electronic equipment to a taxable professional based in mainland France.
Assumptions: goods falling under chapter 85 of the harmonised system, thus covered by the customs union; customs value of 10,000 euros, transport included; customer registered for VAT in France; standard rate of 20%.
Step by step:
- price invoiced by the Andorran seller: 10,000 euros, without IGI, since the export sale is exempt;
- levy at the European border: 0 euros, the goods falling under chapters 25 to 97;
- tax on entry: 10,000 × 20% = 2,000 euros;
- customer's return: 2,000 euros of tax due and 2,000 euros of deductible tax, i.e. a nil balance.
| Step | Tax | Amount |
|---|---|---|
| Exit from Andorra | IGI | 0 € |
| Union border | Customs duties | 0 € |
| Entry into France | Reverse-charged VAT due | 2 000 € |
| Customer's return | Deductible VAT | 2 000 € |
| Final cost | VAT balance | 0 € |
In practice, for a business, purchasing within the Principality costs nothing and ties up no cash thanks to the reverse charge. The situation is different for an individual: on the same shipment, they pay the 2,000 euros on delivery, with no means of recovering them, plus the customs clearance fees charged by the carrier.
Services and online sales: rules differing from goods
Services and online sales to individuals fall outside the "exempt export, taxed entry" scheme that applies to goods. For services, it is the place of establishment of the recipient that determines the applicable tax; for online commerce, dedicated European one-stop shops make it possible to collect the tax at the point of sale.
Services between businesses: reverse charge by the recipient
A service supplied to a business is, in principle, taxable where that business is established, under article 259 of the CGI. When an Andorran company invoices a French business, it applies neither IGI nor French tax: the recipient accounts for it under the reverse charge in application of article 283-2, then deducts it. In the other direction, a supplier from mainland France operates tax-free, with the wording "TVA non applicable, article 259 du CGI", and the Andorran recipient in turn reverse-charges the IGI due on services received from abroad.
Online sales to individuals: the IOSS one-stop shop up to 150 euros
Since 1 July 2021, the 22-euro exemption on small shipments has been abolished: any parcel sent from the Principality to a European individual bears the tax of the place of destination. For shipments with an intrinsic value of 150 euros or less, the seller may join the import one-stop shop (IOSS), charge the tax when the order is placed and remit it each month. One condition is, however, unavoidable: an Andorran seller must appoint an intermediary established within the European area in order to use this one-stop shop. Above 150 euros, the tax is collected on arrival, as in the previous example.
Digital services to individuals: the tax of the consumer's country
Services supplied electronically to private individuals (software, subscriptions, online training, digital content) are taxed where the consumer resides. An Andorran company selling an online training course to a French individual therefore applies 20%, declared through the non-EU one-stop shop (OSS) in a single Member State, from the very first euro of sales.
Points requiring attention for an Andorran company that exports
The rules described above only apply if the transaction is genuinely carried out from the Principality, by a company that conducts its business there. Two mistakes come up regularly among entrepreneurs who set up there to trade with mainland France, particularly those who run their company from abroad, a configuration detailed in our guide to setting up a company in Andorra without being a resident.
Intra-Community VAT number: an identifier you will not have
An Andorran company does not have a European VAT identifier, since the Principality lies outside that area. Its identifier is the NRT. Some suppliers or platforms require one automatically: they must be told that this is a company established outside the Union, rather than trying to obtain one elsewhere in Europe without conducting any business there.
No intra-Community VAT number for an Andorran company
Its identifier is the NRT, to be shown on all import and export documents. Do not apply for one elsewhere in Europe without conducting business there.
Substance in Andorra: the condition for the regime
If decisions are made in mainland France, if stock is stored there or if a team works there, the authorities may consider that the Andorran company has a permanent establishment on their soil. French tax then becomes due on sales made from that establishment, in addition to the consequences for corporate income tax, the Andorran workings of which are presented in our analysis of corporate income tax in Andorra. Effective management and genuine resources in the Principality are essential, as explained in our guide to setting up a company in Andorra. This is the point at which our teams step in: at Engage, we check with you that the way your business is organised is consistent with the tax treatment claimed.
Frequently asked questions about VAT and exporting in Andorra
Do you have to charge VAT to an Andorran customer?
No. A sale of goods shipped to the Principality is exempt under article 262 I of the CGI, provided their exit is proven. It is the recipient who pays the IGI on arrival.
Can an individual resident in Andorra reclaim VAT on a purchase made in France?
Yes, subject to conditions. An Andorran resident is covered by the tax refund granted to travellers domiciled outside the European area, under terms specific to them: minimum purchase amount and validation of the sales voucher on leaving the territory.
Does an Andorran company have an intra-Community VAT number?
No. Since the Principality is outside the European VAT area, an Andorran company is identified by its NRT.
Do products purchased in China and resold from Andorra enter France duty-free?
Yes for industrial goods, if they have been released for free circulation in the Principality and the common external tariff duties have been paid there. The tax on entry remains due.
Who pays import VAT in France?
The importer. A business reverse-charges it; a private individual pays it on delivery, unless the seller has already collected it via the IOSS one-stop shop.
