The Non-Resident Income Tax (NRIT / IRNR) in Andorra

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🏁 Understanding IRNR

The Non-Resident Income Tax (IRNR/ NRIT ) is the tax applied to income generated in Andorra by individuals or entities that are not tax residents in the country. Its structure is similar to the Spanish IRNR and to other international withholding tax systems.

With the entry into force of Law 5/2023, the system changed substantially, particularly in the real-estate field: the former capital gains tax (Law 21/2006), which operated as a stand-alone tax, was repealed and integrated into the existing direct tax system (PIT, CIT and IRNR).

➤ For more details on this change, we recommend the article “Taxation of real-estate capital gains in Andorra”.

👤 Who is subject to IRNR / NRIT?

The following taxpayers are subject to IRNR / NRIT :

• individuals who are not tax residents but obtain Andorran-source income;
• companies and other entities that are not tax residents but generate income in Andorra.

🔎 What counts as Andorran-source income?

According to the law, the following are considered income obtained in Andorra:

• economic activities carried out physically in the country;
• real-estate assets located in Andorra;
• income paid by Andorran residents (with certain exceptions when the service is fully contracted and used abroad).

💼 Income subject to IRNR

🟦 a) Economic activities and services

Any business or professional activity carried out in Andorra is taxed at the general rate of 10%.

🟩 b) Employment income

The following are subject to IRNR when the work is physically performed in Andorra, such as salaries and wages, professional fees, private pensions and remuneration for the administration or management of Andorran entities.

🟧 c) Rental income and real-estate returns

Renting out property located in Andorra is taxed at 10%.
This includes traditional leases, rights of use, or income derived from real-estate-related rights.

🟥 d) Real-estate transfers: the major change introduced in 2023

Following the repeal of Law 21/2006, real-estate capital gains are now taxed under IRNR.

The new regime provides:

• 10% on the capital gain (general rate);
• 15% when the property is sold within the first two years of ownership.

➤ For broader context, we recommend the article “Evolution of Andorra’s tax framework”.

🧭 Income NOT subject to IRNR / NRIT (non-taxation and exemptions)

The most relevant practical rule is:

✅ Investment income is NOT subject to IRNR / NRIT.

This includes:

• bank interest,
• dividends,
• savings-insurance products,
• investment-fund returns,
• and any other financial income defined in Article 13.

👉 No non-resident —neither an individual nor a company— pays IRNR on Andorran-source financial income.

This is one of the reasons Andorra remains highly attractive for international investors.

Other non-taxable or exempt income

Under Articles 8 and 15 of the Law and its Regulation, the following may also be exempt or not subject:

• certain public benefits,
• research grants and scholarships,
• compensations regulated by the Labour Relations Code,
• disability or severe-incapacity benefits from Social Security.

➤ To explore the concept of tax residence further, we recommend the article “Tax residency in Andorra: requirements and real advantages”.

💰 IRNR tax rates

• General rate: 10%
• Exception: real-estate gains with less than 2 years of ownership → 15%

Andorra does not apply high withholding rates or complex layered systems: it remains a simple and uniform model.

🧾 Practical operation: filings and withholding

🔹 When a withholding agent exists

If the Andorran company paying the income is required to withhold tax, the non-resident does not need to file a return.

🔹 When NO withholding agent exists

The non-resident must file a quarterly or annual tax return, depending on the type of income.

🔹 Real-estate transfers

A mandatory withholding applies as a guarantee of payment, similar to the previous capital-gains system, now integrated into IRNR.

➤ For more insight into the property environment, we recommend the article “The Andorran real estate market”.
➤ For a full overview of the system, you may also consult “Taxation in Andorra”.

Conclusion

IRNR is a relatively straightforward tax, with a clear and consistent structure, especially after the 2023 reform. Nevertheless, properly qualifying each type of income, determining whether it is Andorran-source and analysing the treatment applicable to real-estate transfers often requires professional judgement.

It should also be noted that a double tax treaty (DTT) between the country where the income is received and Andorra may reduce the applicable withholding or even eliminate it. To see the full list of DTTs signed between the Principality and third countries, you can consult the article Double tax treaties.

If you would like us to review your situation or need personalised advice on the tax treatment of a specific type of income, you can request your meeting just below or complete the contact form. We will help you make decisions with confidence.

Last revised: November 2025.