About Andorra – Taxes in Andorra

Andorra offers an attractive tax system with significantly lower rates compared to its European neighbours, making it an ideal choice for residents and businesses.

Discover Everything About the Tax System in Andorra

Analyzing Andorra's taxes and their differences with Spain's is key to understanding the tax appeal of this small Spanish country.

Find out how the tax system works in Andorra

Currently, there are people who wonder if taxes are paid in Andorra, and the answer is yes. Andorra is no longer a tax haven and must comply with the payment of taxes required in the country. For this reason, if you are thinking of coming to live in Andorra, you must know which taxes must be paid.

Andorra is a country with much lower taxes than the countries around it and much of Europe. This makes it a country with one of the lowest taxes in the world. Consequently, both residents and businesses benefit from this.

At the moment, the country has no plans to raise its taxes and for this reason it will continue to be a fiscally attractive country compared to neighboring countries.

closeup economist using calculator while going through bills taxes office 1

What are the three main taxes in Andorra?

General Indirect Tax (IGI) (equivalent to VAT in Andorra)

The General Indirect Tax (IGI) of Andorra is the equivalent of the VAT (Value Added Tax) that is paid in the countries of the European Union. Andorra's IGI becomes the main indirect tax in the country. As with VAT, this General Indirect Tax consists of different types, depending on the product or service.

  • In general, the type of l'tax is d'a 4.5%. If we compare it with other countries, Spain has a 21%, France has 20%, and Germany has a rate of 19%, Andorra offers a General Indirect Tax rate very interesting.
  • Andorra offers a type super reduced from the 0% in the case of some medical and educational services, first home rentals, stamps and investment in gold.
  • There is also a reduced type of l'1% in the case of basic foodstuffs, water for human and animal consumption and irrigation, also in books, magazines and newspapers.
  • There is a special type of 2.5%, for transport, excluding cable transport. This special type of 2.5% also applies to libraries and archives, art and culture institutions such as museums, monuments and historical sites, music, cinema and theater, among others.
  • The type of lien s'has increased to 9.5% for banking and financial services.

Corporate tax

If you want to open a company in Andorra, this tax is of particular interest to you. Andorra has a corporate tax with a fixed general type of the 10%.

There is also one special regime for exploitation of intangibles, which allows a tax credit of an 80%. In other words, the resulting corporate tax is for 2%.

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ICOB is a company formed by professionals from the legal, accounting and communication sectors that advises on the creation and management of companies in Andorra.

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