Taxation of digital assets and cryptocurrencies in Andorra

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🏁 Context and legal framework

The evolution of digital markets in recent years has introduced new types of assets — such as cryptocurrencies, tokens and other digital instruments — which also generate taxable income.

In Andorra, their taxation falls under the general regime of the Personal Income Tax (IRPF), established by Law 5/2014 and its consolidated text of 19 June 2019, as amended by Law 5/2023 of 19 January.

➤ To understand how this tax works and which types of income are included, see Personal Income Tax in Andorra: key bases and exemptions.

💱 Nature and fiscal qualification

Digital assets have no specific regime, so they are treated by analogy as capital gains or losses, as defined in Article 24 of the IRPF Law:

“Capital gains and losses are variations in the value of a person’s assets that arise as a result of any alteration in their composition.”

This interpretation was first introduced in the Technical Communication of 4 March 2015 (BOPA No. 18), concerning foreign-currency transactions. It states that every currency conversion can generate a taxable capital variation.
Since then, the Andorran tax authority has applied the same reasoning to cryptocurrencies and other digital assets, treating them as equivalent to ordinary currencies for tax purposes.

➤ For a broader overview of how this approach fits within the national framework, read Taxation in Andorra: structure, rates and real advantages.

📊 How cryptocurrencies are taxed

As with traditional currencies, each exchange or transfer (e.g. BTC → ETH or ETH → EUR) is considered a change in ownership and therefore generates a capital gain or loss.

The gain or loss is calculated as the difference between the acquisition value and the transfer value, both expressed in euros.

Taxation occurs at the time of sale, exchange or conversion.
There is no withholding or prepayment, and the applicable tax rate is 10 % (savings base).

👉 This means that even crypto-to-crypto exchanges can trigger a tax liability, even if no conversion to euros takes place.

🧾 Practical example

If an Andorran resident purchases 0.5 BTC for €45 000 and later sells or exchanges them for ETH valued at €47 000, a capital gain of €2 000 will arise and must be reported for that fiscal year.

❗For operations made through exchanges such as Binance or Coinbase, performance reports are usually available and greatly simplify calculations.
However, purchases and transfers executed through cold wallets require meticulous tracking, which can make gain calculation more complex.

💼 Other digital assets

The same principle applies to:

• Investment or security tokens
• NFTs when sold or exchanged for other assets
• Stablecoins, whenever they produce a gain or loss relative to the euro

If these assets are held to generate recurring income (e.g. staking rewards or interest), such income may qualify as movable capital income under Article 19 of Law 5/2014, as it derives from ownership rather than transfer.

📈 Exemption on the sale of shares and participations

The same law also provides a highly favourable regime for capital gains derived from the sale of shares or corporate participations:

• Capital gains from the sale of shares or participations are exempt from IRPF by default, provided the taxpayer has not held more than 25 % of the company’s capital or voting rights.
• If the shareholding exceeds 25 %, the gains are also exempt if the taxpayer has owned the participation for at least ten years prior to the sale.

This exemption (Article 5.k of the consolidated IRPF Law) makes Andorra one of the most competitive jurisdictions in Europe for asset and corporate-structure optimisation.

🧠 As this exemption applies to all kinds of shares and participations, including investment funds, investors seeking crypto exposure from Andorra may find it most efficient to do so through funds investing in digital assets.
Several such products are already available on the market — including some offered by Andorran institutions.

➤ For further insight, see Tax residency in Andorra: requirements and real advantages, which explains how this regime benefits both investors and entrepreneurs.

⚖️ Tax base and applicable rate

Gains and losses derived from digital assets are integrated into the savings base and taxed at the general rate of 10 %.

Losses may be offset against other capital gains of the same nature within the same year or, in certain cases, in subsequent years.

Conclusion

Digital assets and cryptocurrencies are fully taxable in Andorra under the IRPF, and each transaction may result in a capital gain or loss.

However, certain investment structures can achieve full exemption, resulting in an effective tax rate of 0 %.

The Andorran system also offers legal certainty, a maximum rate of 10 %, and exceptionally favourable exemptions for investors and entrepreneurs who act with transparency and strategic planning.

📩 Would you like to optimise your digital-asset taxation in Andorra?
Contact our team — we’ll help you structure your investments securely and efficiently.

Last reviewed: November 2025