Andorran tax for expats: a simple, stable system with real tax rates below 10%

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🏁 A tax system that never reaches 10%

For any expat considering a move to Andorra, the first question is always: “How much tax will I actually pay?”.
The answer surprises most people. Although both Personal Income Tax and Corporate Tax have a nominal rate of 10%, the real effective rate almost never reaches that figure.

A professional earning around €200,000 a year typically ends up with an effective direct tax rate of about 8%. At €300,000, it still remains below 9%.
The exact figure depends on circumstances and structure, but the overall reality is clear: low rates, generous exemptions and a stable, predictable framework.

➤ To explore income taxation further, see Personal Income Tax in Andorra (IRPF).

🧮 Why direct taxation is so low

Andorra’s tax architecture relies on three core elements:

• very low or fully exempt initial brackets
• a clear and stable 10% general rate
• efficient corporate structures with adjusted taxable bases

In practice, even high incomes do not reach 10% real taxation, with most effective rates falling between 2% and 9%, depending on income level and how the taxpayer structures their affairs.

➤ If you plan to operate through a company, see Corporate income Tax in Andorra.

This model enables long-term planning and financial stability rarely achievable in other jurisdictions.

💹 Taxation of financial income

Beyond everything discussed above, it is important to highlight how financial income is taxed in Andorra. Only a small portion of these incomes is subject to taxation, as the vast majority is not taxed in the Principality.

For instance, dividends from Andorran sources and most capital gains are exempt. Learn more in our article How financial income is taxed in Andorra.

🕊️ A country with no inheritance or gift tax

Another decisive factor: Andorra levies no inheritance tax and no gift tax.
No brackets, no reductions, no surcharges.

This makes the country particularly appealing for:

• structuring family wealth
• planning intergenerational transfers
• protecting long-term assets from fiscal erosion

➤ For further insight, see Succession Planning from Andorra.

🏡 Living and working in a safe, predictable, high-quality environment

Many expats arrive because of taxation but remain for the quality of life:

• virtually non-existent crime
• a banking system with over 75 years of history
• a safe and stable environment for families and professionals
• extensive leisure options
• a pleasant mountain climate with distinct seasons
• a solid, predictable legal framework

➤ To understand daily life, see Living and Working in Andorra. To discover the natural environment, see Climate in Andorra: quality of life and natural surroundings.

🎭 Culture, gastronomy and an unexpectedly rich offering

Despite its size, Andorra offers an impressive cultural and gastronomic landscape:

• theatres, opera, museums and exhibition spaces
• hundreds of restaurants, including fine dining
• thermal centres, leading ski resorts and a year-round calendar of events

All supported by a strategic location: Barcelona and Toulouse are just two hours away, making travel and connections effortless.

This is not magic: it results from the country’s substantial tourism flows (between 7 and 12 million visitors annually), giving Andorra the services of a large city despite its small size.

Conclusion: fiscal efficiency, legal certainty and exceptional quality of life

For an expat seeking fiscal efficiency, stability and a safe environment, Andorra offers a rare combination: low direct taxation, no inheritance or gift tax, a solid financial system and outstanding quality of life.

Still, to take full advantage —and avoid mistakes regarding tax residency, corporate structuring or international planning— specialist advice is essential, especially for those maintaining economic interests abroad.

If you would like a personalised assessment or to discuss your case in detail, you may book a meeting below or contact us through the form.

We are driven by a genuine commitment to helping people build the life they envision.

Last updated: November 2025