Wealth tax in Europe: where it exists and why Andorra stands out as an exception

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🏁 Introduction

Wealth taxation has returned to the centre of Europe’s fiscal debate. With growing budgetary pressure and increasing attention on high-net-worth individuals, several countries have reinforced or reshaped their taxation on wealth, while others have abolished it due to inefficiency or distortionary effects.

For an entrepreneur or investor considering relocating to Andorra, understanding which countries apply a wealth tax, how these taxes are structured, and how they interact with inheritance and gift taxation is essential for long-term planning. In this context, Andorra stands out for the absence of wealth tax, inheritance tax and gift tax, making it a uniquely competitive jurisdiction within Europe.

💡 What do we mean by “wealth tax”?

A wealth tax is a recurring levy (typically annual) imposed on the net value of a person’s assets, after deducting liabilities. It does not tax the income generated by assets, but the accumulated value itself.

It must be distinguished from other tax categories:

• Inheritance taxes, which apply at the time of death.
• Gift taxes, which apply to free transfers made during one’s lifetime.

In Europe, this distinction is crucial: very few countries maintain a periodic tax on global net wealth, although many apply taxes on specific assets which, in practice, function as partial or sector-specific wealth taxes.

🌍 European countries with a wealth tax or similar mechanisms

According to the most recent comparative analyses, several European countries apply recurring taxes on personal wealth:

• Spain
• France
• Belgium
• The Netherlands
• Italy
• Norway
• Switzerland

🇪🇸 Spain: Wealth Tax and the State Tax on Large Fortunes

Spain maintains a Wealth Tax, applied to net wealth above certain thresholds. Autonomous communities can modify rates and allowances.

To prevent the practical disappearance of the tax in some regions, the central government introduced the Temporary Solidarity Tax on Large Fortunes, applicable to net wealth above €3 million. Spain is one of the jurisdictions where wealth is most heavily taxed.

🇫🇷 France: Impôt sur la Fortune Immobilière (IFI)

Since 2018, France taxes only net real-estate wealth above €1.3 million through the IFI. Previously, the ISF taxed all assets. The IFI remains a politically sensitive tax and subject to potential reform.

🇧🇪 Belgium: tax on securities accounts

Belgium applies an annual 0.15% tax on securities accounts with balances exceeding €1 million per holder.

🇳🇱 The Netherlands: “Box 3” system

The Box 3 regime applies a deemed return on savings and investment assets. Although not formally a wealth tax, it operates similarly.

🇮🇹 Italy: IVIE and IVAFE

Italy taxes certain foreign assets held by residents:

• IVIE: value of foreign real estate.
• IVAFE: financial assets held abroad.

These operate as partial wealth taxes on international assets.

🇳🇴 Norway: a major political debate

Norway applies a state and municipal tax (formuesskatt) on net wealth. For 2025, wealth exceeding roughly NOK 1.76 million is taxed at around 1%, with higher brackets for very large fortunes.

🇨🇭 Switzerland: cantonal wealth tax

Switzerland does not levy a federal wealth tax, but all cantons tax net personal wealth. Rates vary by canton and typically reach around 1%.

📉 General trend: few broad wealth taxes, many forms of asset-based taxation

Over recent decades, many European countries have abolished general wealth taxes (Germany, Sweden, Denmark, Finland, Ireland…), considering them inefficient, complex and administratively burdensome.

However, the current economic and political climate has revived discussions around:

• new wealth-tax proposals,
• minimum contributions for very high-net-worth individuals,
• strengthened inheritance and gift taxation.

In short:

• Broad wealth taxes are now the exception.
• Asset-specific taxes have become the norm.
• Inheritance and gift taxes remain central across Europe.

🏔️ Andorra: no wealth tax, no inheritance tax, no gift tax

Unlike most European jurisdictions, Andorra does not apply:

• wealth tax
• inheritance tax
• gift tax

Inheritance and gift transfers are not taxed, even between non-relatives, provided residency and asset-location rules are met.

Although notary fees, registry costs or certain indirect taxes may apply, there is no equivalent to European wealth, inheritance or large-estate taxes.

For a complete overview of the Andorran tax system, we recommend the following article Taxation in Andorra: an overview of the tax system

If you would like to explore Andorra in more detail, we also recommend Types of residence in Andorra: active, passive and fiscal and Living and working in Andorra.

🧭 Practical implications for a European entrepreneur or investor

For someone residing in Spain, France or other European countries, wealth-planning must take into account:

• Leaving a country that applies a wealth tax, and possible exit-tax consequences. See the article Exit tax in the European Union.
• The assets and heirs that remain in countries with inheritance or gift taxation.
• The coordination of double-tax treaties.

To understand how this works in Andorra, we recommend Double-tax treaties in Andorra

In this context, Andorra allows:

• Wealth consolidation without an annual net-wealth tax.
• Efficient succession-planning structures (wills, holdings, family agreements). You can also explore: Holding companies in Andorra

But the absence of taxation in Andorra does not eliminate obligations in the country of origin: planning must be thorough, technical and cross-border.

Conclusion

Europe’s approach to wealth taxation is evolving. While few countries maintain broad wealth taxes, many apply partial taxes on assets or on intergenerational transfers.

Against this backdrop, Andorra offers a unique environment: no wealth tax, no inheritance tax, no gift tax, and a stable, competitive tax system. For entrepreneurial families, high-net-worth individuals and internationally minded professionals, Andorra can serve as a highly efficient platform for long-term asset protection and succession.

📩 Would you like to review your case in detail?

We can help you build a solid fiscal and estate-planning strategy for your relocation or investment in Andorra.

Request a meeting or contact us through our form.

Last updated: November 2025