Tax residency in Andorra: real requirements and benefits

Reading time: 5 minutes

What does it mean to be a tax resident in Andorra?

Being a tax resident in Andorra means that your main tax obligations — both personal and business-related — are centred in the Principality.
Unlike many other European countries, Andorra does not levy taxes on wealth or inheritance, and personal income tax (IRPF) never exceeds 10 %.
This makes Andorra a preferred destination for entrepreneurs, digital professionals and families seeking to optimise their tax structure without giving up legal certainty.

It should be noted, however, that unlike administrative residence — which is granted by a third party — tax residence is not formally awarded by any authority, but rather results from personal self-assessment.
That said, if the conditions established by law are not met, this status may be challenged by third parties.

Andorran companies

It should be borne in mind that this article refers exclusively to the tax residence of individuals.
If you wish to understand how tax residence works for companies, you can consult Place of effective management: the key to determining a company’s tax residence.

Likewise, if you are interested in investing in Andorra or setting up an Andorran company, we recommend Setting up a company in Andorra: steps, requirements and advantages.

If, on the other hand, you wish to gain an in-depth and detailed understanding of everything that should be considered before setting up a company — beyond the formal process — we recommend The definitive guide to setting up a company in Andorra.

Requirements to be considered a tax resident

The determination of tax residence for individuals is based on the criteria established in the legislation governing Personal Income Tax (IRPF), which in Andorra is set out in Law 5/2014 of 24 April, and in particular Article 8 thereof.

If the requirements laid down in Article 8 are met, the individual is considered a taxpayer for Andorran IRPF purposes and, therefore, a tax resident in Andorra.

The relevant criteria are as follows:

• Physical presence
  Residing in Andorra for more than 183 days during the calendar year.
  Short trips abroad do not interrupt the count provided that habitual residence remains in Andorra. Where such absences are considered sporadic, these days may be counted from an Andorran perspective and added to the days of stay in the Principality.
• Centre of economic interests
  A person is considered a tax resident if they centralise their main economic or professional activity in Andorra, or manage their assets from the country. This criterion therefore encompasses both income-related elements (earnings or economic activity) and patrimonial elements.
• Personal and family ties
  Where the spouse and minor children are tax residents in Andorra, the tax residence of the family unit as a whole is presumed, unless proven otherwise. This is a presumption which, when applicable, constitutes a particularly strong connecting factor.

The need for a detailed analysis

The criteria outlined above require a detailed analysis of each individual situation, since in many cases — beyond the strict legal criteria — the administrative interpretation applicable to the specific case is of decisive importance.

By way of example, both in relation to the centre of economic interests and to personal ties, there is no uniform or homogeneous criterion. This makes it essential to carry out a rigorous and in-depth analysis of each taxpayer.

Documentation and practical process

The process for recognising tax residence, while it may vary from case to case, generally includes the following elements:

• Holding an administrative residence permit in Andorra.
  For further information, you may consult Types of residence in Andorra: all administrative modalities.
• Proof of health insurance coverage (public or private) and an Andorran tax identification number (NRT or NIA).
  Both requirements are directly linked to holding an administrative residence permit.
• Application to the Andorran Tax Authority (DTF) for the issuance of a tax residence certificate.
  This certificate is essential in the vast majority of cases.
• Proof of sufficient financial means and an effective domicile in the Principality.
  In many cases, this requirement is closely linked to the previous point.
• Proof of ownership or a housing lease agreement.
  The mere fact that a third party certifies that you reside in a property they own, without any financial consideration, is generally not considered sufficient.

If a conflict of tax residence arises, the situation may become more complex and require evidence of additional elements, such as sufficient or predominant economic activity, family interests or other relevant ties.
If you wish to explore this issue further, you can consult Tax residence conflicts: when two countries consider you resident at the same time.

Although, in theory, the procedure is not excessively complex, it must be carefully planned to avoid tax overlaps with the country of origin — especially during the year of relocation — and to assess in detail which factors may pose a risk in each specific case.

Advantages of being taxed in Andorra

Being a tax resident in Andorra represents a significant advantage compared to most other countries, particularly those in the surrounding region.
The Principality offers one of the most competitive tax frameworks in the world, with nominal rates that never exceed 10 % and effective rates that, in most cases, can fall below 5 %.

If you wish to obtain a comprehensive overview of Andorran taxation, you can consult Taxation in Andorra: a practical guide to taxes, obligations and real risks.

Although Andorra has a complete tax system with several tax figures, the main ones are as follows:

• Personal Income Tax (IRPF): maximum rate of 10 %, with significantly lower effective rates in practice.
  Further details can be found in Personal Income Tax (IRPF) in Andorra.
• Corporate Income Tax: general rate of 10 %, with partial exemptions on dividends.
• IGI: general rate of 4.5 %, one of the lowest in the world.
  More information is available in VAT in Andorra: how the General Indirect Tax (IGI) works.
• No wealth tax, inheritance tax or gift tax.
• Extensive network of double taxation treaties, including agreements with Spain, France, Portugal, Luxembourg, the United Arab Emirates, South Korea, Iceland and Lithuania.
  A full list is available at Double taxation treaties (DTTs) in Andorra.

In addition, Andorra offers institutional stability, strong legal certainty and a high quality of life, all of which support the development of long-term projects.

If you wish to review the main tax figures and how they operate, you can consult Taxation in Andorra: advantages and obligations.

Tax comparison with other countries

Very few countries offer a tax burden as low as that of the Principality of Andorra.
Most taxpayers benefit from effective tax rates between 2 % and 5 %, and the absence of wealth, inheritance and gift taxes further reinforces Andorra’s exceptional position.

If you are interested in becoming a tax resident in the Principality, the first step is to obtain an administrative residence permit.
To explore this further, you can consult Living in Andorra: the essential guide to obtaining residence and settling safely.

Common mistakes

Becoming a tax resident in Andorra is entirely feasible, but it is essential to avoid certain risks, particularly in relation to other jurisdictions and, especially, the country of origin. Common examples include:

• Failing to properly deregister from the country of origin.
• Maintaining poorly structured bank accounts or companies outside Andorra.
• Failing to adequately prove physical presence or means of subsistence to the DTF.
• Using Andorra as a merely “formal” address without effective residence (only valid in very specific cases).
• Maintaining strong personal, family or economic ties with other jurisdictions without carrying out a detailed analysis.
• Not contributing to the Andorran social security system, or contributing simultaneously in multiple jurisdictions.

The Andorran authorities require consistency between declared residence, economic activity and actual lifestyle.

It is also crucial not to confuse administrative residence (residence permit) with tax residence.
To understand the differences, you can consult Administrative residence and tax residence in Andorra: essential differences.

Likewise, if you wish to understand the differences between active, passive and tax residence, we recommend reading Types of residence in Andorra: active, passive and tax, where the requirements and advantages of each modality are explained.

Conclusion

Establishing tax residence in Andorra is a strategic decision that combines tax efficiency, legal certainty and quality of life.
By meeting the legal requirements and planning the relocation correctly, it is possible to benefit from a stable, competitive and internationally recognised system.

If you would like us to help you clarify doubts, plan a relocation or assess whether your tax residence is properly consolidated, you can contact us via the Contact form.

If, instead, you prefer a personalised and fully confidential consultation meeting, you can book your meeting at the bottom of the page.

Last review: December 2025