Andorra tax residency: everything you need to know in 2026 starts with an important distinction: holding an Andorran residence permit does not automatically settle your tax position. Tax residence depends on where you live, where your economic interests are based and how another country may still regard you as resident.
When are you considered a tax resident in Andorra?
Under Andorran rules, an individual is generally considered tax resident if they spend more than 183 days in Andorra during the calendar year. The days do not necessarily need to be consecutive. Authorities can also consider whether Andorra is the main base of your economic or professional activities, or where your family and personal interests are centred.
For example, someone who spends fewer than 183 days in the Principality but runs an Andorran business, works locally and keeps their principal home in La Massana, Escaldes-Engordany or another parish may still need to analyse their tax position carefully. Your previous country may also apply its own residence tests, so moving to Andorra does not by itself end tax obligations abroad.
Residence permit versus tax residence
Immigration residence is managed through the relevant Andorran authorities and immigration procedures, while taxation is administered by the Govern d’Andorra. In practice, you should keep evidence supporting both your legal residence and your actual day-to-day presence.
- Keep rental or purchase contracts, utility bills and local registration documents from the relevant comú.
- Retain travel records, such as flight bookings, border evidence and calendar records.
- Keep employment, company-management and invoicing documents showing where you work.
- Register household services and essential contracts, including FEDA electricity and Andorra Telecom communications, where applicable.
- Maintain records of school, healthcare and family ties in Andorra.
If you need formal proof for a foreign bank, employer or tax authority, ask about obtaining an Andorran tax residence certificate through the Govern d’Andorra’s tax administration procedures. A residence card alone may not be enough for a double-tax treaty claim.
Active residency in Andorra
Active residence is normally used by people who work in Andorra. This may involve an employment contract with an Andorran employer, self-employment, or establishing and managing a company, subject to the applicable immigration quota and approval requirements.
Self-employed applicants and company owners should separate the immigration application from the tax analysis. Incorporating a company does not automatically make all of its income personal income, and becoming a director does not automatically prove that management is carried out in Andorra. Payroll, social security registration, office arrangements, accounting records and actual business activity can all matter.
Active residents should also understand CASS, Andorra’s social security system. Employees and qualifying self-employed workers generally have CASS obligations, and these contributions are separate from personal income tax. Before moving, confirm the current registration, contribution and healthcare rules with CASS or a qualified local adviser.
Passive residency in Andorra
Passive residence is designed for people who do not intend to carry out a normal local professional activity, such as financially independent individuals, investors or certain internationally mobile residents. It has its own immigration conditions, including proof of sufficient financial resources, private medical insurance, an Andorran address and an investment requirement that can change under legislation.
Requirements for passive residence have been tightened and revised in recent years. The exact minimum investment, government fees, dependent allowances and required documentation should therefore be checked with the Govern d’Andorra before committing funds. Do not assume that buying a property alone guarantees approval or creates tax residence.
How Andorra taxes residents
Andorra’s personal income tax is progressive. In broad terms, the lowest bands are taxed at 0%, an intermediate band at 5%, and the highest rate is 10%, subject to the legislation and calculation rules in force for the relevant year. Taxable income can include employment income, business income, rental income and certain investment returns. Allowances, deductions and family circumstances affect the final calculation.
Residents should also consider the indirect tax system. The general IGI rate is 4.5%, with special rates for some goods and services. Property purchases, professional services and business transactions may involve additional tax, registration or administrative costs. Companies are generally subject to corporate income tax, while dividends, capital gains and foreign income require case-by-case review.
Practical steps before moving
- Ask your current country for its departure, tax-clearance or notification requirements.
- Map salary, dividends, rental income, investments and pensions before choosing active or passive residence.
- Review any double-tax treaty between Andorra and your country of origin.
- Open banking arrangements only after preparing clear source-of-funds documentation.
- Use a local gestor or tax adviser for your first return and review the position annually.
Andorra participates in international tax-information exchange, so residents should report foreign assets and income accurately where required. The safest approach is to document your move, meet the 183-day and economic-interest rules honestly, and obtain advice before changing company ownership or relocating family members.
Once your residence and tax planning are clear, browse local businesses in the directory to find professional advisers, property services, telecom providers and other useful services in Andorra.
