Personal income tax is paid at the following rates:
On capital gains, in general, the tax is paid at the rate of 10%.
Capital gains are included in the total tax base. Real estate gains are taxed at the rates from 1% to 15% depending on the period of possession prior to the sale; this tax does not apply to the sale of real estate after 10 years of possession.
Resident companies pay tax on their worldwide income, non-residents pay tax on income from sources in Andorra.
Income tax is paid at a rate of 10%.
Dividends received may be exempt from taxation under a number of conditions.
Capital gains are included in the total tax base.
Profit from the sale of real estate is taxed at rates from 1% to 15% depending on the period of ownership before the sale, if real estate is sold after 10 years of ownership this tax does not apply.
Profit from the sale of real estate is also included in the income tax base with a credit for real estate sale tax.
Holding companies holding shares in foreign companies may, under certain conditions, not pay income tax on dividends received and gains from the sale of shares.
The standard rate of VAT is 4,5%.
For certain goods and services, the rate is 2,5%, 1% and 0%, and for banking and financial services it is 9,5%.
Dividend and interest payments to non-residents are not subject to withholding taxes.
When paying royalties, the tax is 5%.
Tax is withheld at 10% on payments for technical services.
Employers have to pay social contribution on employees' remuneration at the rate of 14,5%, employees - at the rate of 5,5%.
Local property taxes are paid depending on the size of the property.
On the transfer of real estate, tax is usually paid at rates ranging from 1,75% to 2,5%.
Andorra has entered into the following tax information exchange arrangements:
10 DTCs: Cyprus, France, Hungary, Liechtenstein, Luxembourg, Malta, Portugal, San Marino, Spain, United Arab Emirates.
24 TIEAs: Argentina, Australia, Austria, Belgium, Czech Republic, Denmark, Faroe Islands, Finland, France, Germany, Greenland, Iceland, Italy, Korea, Liechtenstein, Monaco, Netherlands, Norway, Poland, Portugal, San Marino, Spain, Sweden, Switzerland.
BEPS MLI: On June 7, 2017, Andorra signed and ratified the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The MLI entered into force for Andorra on January 1, 2022.
CRS MCAA: On December 3, 2015, Andorra signed the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information under the Common Reporting Standard (CRS MCAA), under which Andorra receives information from its financial institutions and automatically exchanges this information with other jurisdictions on an annual basis. The automatic exchange began in September 2018.
CbC MCAA: On 18 October 2018, Andorra signed the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (CbC MCAA), which allows Andorran banks to collect and transmit data on the accounts of foreign residents to their country's tax authorities, who then automatically exchange this information with the tax authorities of other participating countries.
There are no currency controls in the country.
