Andorra (AD)
Andorra is a tiny parliamentary co-principality nestled in the Pyrenees mountains between France and Spain, governed jointly by the French President and the Bishop of Urgell.
Tax & Payslip Guide
Understanding your taxes in Andorra — tax year January 1 – December 31 (calendar year).
📊 Income Tax Brackets
| Income from | Income to | Rate | Notes |
|---|---|---|---|
| 0 | 24,000 | 0% | Tax-free allowance — the first €24,000 of annual income is entirely exempt from IRPF (personal income tax). This threshold was introduced in 2015 and makes Andorra attractive for low-to-middle income earners. |
| 24,000 | 40,000 | 5% | Income between €24,001 and €40,000 taxed at 5%. Effective rate remains very low for most residents. |
| 40,000 | ∞ | 10% | Income above €40,000 taxed at 10%. The maximum personal income tax rate in Andorra — a hard cap of 10% on all income regardless of amount. No higher bands exist. |
🏛️ Social Contributions
CASS (Caixa Andorrana de Seguretat Social) contribution for employees. Covers healthcare (CASS mutual health insurance), accidents, disability, and pension. Contribution ceiling applies — assessed annually. Total combined rate: 22% of gross salary (employee 6.5% + employer 15.5%).
Self-employed workers pay both employee and employer shares — 22% of net professional income. This covers CASS healthcare, disability, maternity/paternity, and pension accrual. CASS contributions for autònoms are assessed on declared income. Minimum contribution base applies.
Passive residents who do not work in Andorra must enrol in CASS voluntarily at a flat monthly rate based on the contribution base they elect. This is mandatory for healthcare access and residence renewal purposes.
🛒 VAT Rates
Andorra's consumption tax is called IGI (Impost General Indirecte) — the equivalent of VAT. The 4.5% standard rate is dramatically lower than France (20%) or Spain (21%), making Andorra a duty-free shopping destination for millions of visitors annually. Electronics, tobacco, alcohol, and perfumes are particularly price-competitive.
🧾 Sample Payslip Decoder
🌍 Special Expat Tax Rules
Andorra has NO wealth tax, NO inheritance tax between direct heirs, NO capital gains tax on personal investments held outside business assets, and NO dividend withholding tax for residents. The 10% hard cap on income tax combined with these exemptions makes Andorra's tax regime one of the most favourable in Europe. IRPF (Impost sobre la Renda de les Persones Físiques — personal income tax) was introduced in 2015. Tax residency requires spending 183+ days per year in Andorra (same as Spain). Key consideration: many countries (especially Spain) scrutinise Andorran tax residence claims — ensure you genuinely spend 183+ days in Andorra and can document this with receipts, credit card statements, and entry/exit records.
📋 Double Tax Treaties
Andorra has signed double taxation agreements (DTAs) with: France (2013), Spain (2015), Luxembourg (2014), Portugal (2015), Liechtenstein (2015), Malta (2015), the United Arab Emirates (2015), and a growing list of additional countries. The DTA with Spain is especially important — it determines which country has primary taxing rights for Spanish-origin income earned by Andorran residents. Andorra and the UK signed a DTA (in force from 2023). EU information exchange: Andorra is compliant with OECD/FATF standards and participates in CRS (Common Reporting Standard) automatic exchange of financial information with 100+ countries — accounts are not secret from tax authorities.
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