Tax System of Andorra

By in Living in Andorra

The Andorran tax system is known for being friendly for individuals and companies. But surprisingly, there are many people who still mistakenly associate the Principality of Andorra as a tax haven, but it is not. Not at all. Andorra stopped being a tax haven several years ago.

Even so, millions of people still consider Andorra to be a tax haven because the country where they are currently living is a true tax hell.

They know what about that

There I give them every reason. If you live in Spain or France, you will know what I am talking about.

Compared to other much larger countries, Andorra’s tax system is quite simple. Here you have a summary of the types of taxes, sections and percentages:

  • Personal income tax: 0-10%
  • Tax on company profits: 10%
  • People earn € 24,000 per year, they have a tax rate of 0%. But the tranche from € 24,001 to € 40,000 per year are subject to a 5% tax. For those people who earn more than € 40,000 per year, they have a 10% tax.
  • Married couples where the combined total income is less than € 40,000 have a tax rate of 0%. So, above this figure, it is taxed at 10%.
  • The IGI (sales tax): 4.5% In Spain it is known as IVA, in France as TVA and in Anglo-Saxon countries as VAT.
  • There are no wealth taxes.
  • There is no donation tax.
  • There is no inheritance tax.
  • Real estate:
    • The capital gains tax on Andorran real estate: 0-15%
    • If you sell within the 1st year: 15%
    • If you sell within the 2nd year: 13%
    • Sell ​​in the 3rd year: 10%
    • Sell ​​in the 4th year: 9%
    • From year 4 inwards, the rate decreases 1% per year, which means that the property is tax-free after 12 years of ownership.

If you want more up-to-date and in-depth information on official taxation, you can contact the Government of Andorra.

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