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🏁 Understanding how financial income is taxed in Andorra

Financial income — interest, dividends, bank yields, bonds or investment funds — is a common part of the wealth of individuals and companies alike. However, its taxation changes entirely depending on who earns it and where it comes from.

Andorra applies a simple, though not fully homogeneous, structure:

• Resident individuals are taxed under the IRPF.
• Non-residents (IRNR) are generally exempt.
• Companies include these items in Corporate Income Tax.

This article explains, clearly and without unnecessary complexity, how financial income is actually taxed in Andorra.

➤ If you want to understand the Andorran tax framework more broadly, you can read our article Taxation in Andorra: structure, tax rates and real advantages.

💼 IRPF for Andorran tax residents

Financial income forms part of investment income and, as a general rule, is taxed at 10 %. However, several important exceptions apply.

✔️ Applicable rate

In most cases, the standard tax rate is 10 %.
That said, a significant portion of financial income is exempt.

✔️ Dividends

• From Andorran companies → theoretically taxed at 10 %, though fully exempt in practice.
• From abroad → in principle taxed at 10 %, but since they usually arrive with withholding tax in the source country, there is often no additional Andorran tax.

When a Double Tax Treaty (DTT) exists between Andorra and the source country, the withholding may be even lower.

➤ For a deeper understanding of international tax credits, see Double Taxation Treaties (DTTs) in Andorra.

✔️ Interest and other investment income

Interest and income from fixed-income securities (bonds, notes, loans, etc.) are generally taxed at 10 %.

If these amounts arrive with foreign withholding, that withholding is creditable against IRPF in Andorra.

✔️ Gains from financial products

In general, most capital gains derived from financial products (transfer of shares or equity interests) are exempt.

They are only taxable if:

• the individual holds more than 25 % of the participation, and
• has held it for less than 10 years.

Other gains — such as those from cryptocurrencies — are taxed at the general 10 % rate.

➤ For more details, we recommend reading Taxation of digital assets and cryptoassets in Andorra.

✨ The €3,000 exemption

The first €3,000 per year of investment income is exempt.
This includes:

• bank interest and deposits
• fixed-income yields
• dividends

➤ To understand the structure of the personal tax system, see Personal Income Tax (IRPF) in Andorra.

🌍 IRNR for non-residents: the general rule is 0 %

The IRNR regime is particularly simple for financial income: in most cases it is not taxed at all.
The objective is straightforward: to attract foreign capital to Andorran financial products.

✔️ Interest: not subject

Interest paid by Andorran banks to non-residents is not subject to tax, with no withholding or filing requirement.

✔️ Dividends: 0 %

Dividends paid by an Andorran company to a non-resident are taxed at 0 %, unless linked to a permanent establishment.

✔️ Financial gains

Capital gains from financial products are also taxed at 0 %, except in very specific cases related to indirect real-estate assets.

In short: a non-resident receiving financial income from Andorra pays 0 % tax in the country.

➤ For a complete overview, see Non-Resident Income Tax (IRNR) in Andorra.

🏢 Andorran companies: Corporate Income Tax (CIT)

For companies, financial income is incorporated directly into taxable income.

✔️ General rule

• All financial income is included in the accounting result.
• The general CIT rate is 10 %.

✔️ Dividends received by companies

• From Andorran companies → exempt if a minimum participation threshold is met.
• From abroad → taxed at 10 %, although international double-tax relief often results in no effective tax.

✔️ Interest and financial returns

Always taxed at 10 %.

✔️ Capital gains

Taxed at 10 %, except where international double-taxation exemptions apply.

➤ For full details, see Corporate Income Tax in Andorra: rates, special regimes and tax deductions.

Conclusion

The taxation of financial income in Andorra combines simplicity, competitiveness and technical consistency.

• Residents are taxed moderately, with relevant exemptions.
• Non-residents almost never pay tax.
• Companies apply the standard CIT rules.

As a result, for most financial investors, the most efficient structure is often to invest personally, except in situations involving business groups or related-party transactions.
➤ You can read more about this in our article on related-party transactions.

If you are considering any type of financial investment and want to structure your tax position sensibly — both now and in the future — we can assist you with clarity and confidence.

📩 You can request a personalised meeting below or fill in the contact form.

Last updated: November 2025.