Unlike in France or Spain, the VAT is only 4.5% maximum in Andorra. The rate is the lowest in Europe. In these EU countries, the tax is actually around 20 to 21%. In Andorra, the general VAT is called IGI or Impuesto General Indirecto. Andorra's tax law provides great flexibility for both individuals and investors.

VAT in Andorra: taxes on goods and services

In the Principality of Andorra, direct taxation remains very low, or even non-existent in many cases. The tax on goods and services generally disappears in the price system. 

There is no tax on education, health services or food, among other things. All health care provided in public facilities is effectively taxed at a reduced rate of 0%. The same applies to childcare, private tuition, housing rental contracts, etc.

With this rate, the Principality of Andorra is among the countries in Europe with a very low tax percentage. This value added tax is only applied to goods and services that you purchase in Andorra. 

Taxes on company activities

For all those who wish to quickly make their activities profitable in a tax framework that offers many advantages, expatriation to Andorra is worth considering. Taxation is low. Taxes imposed on corporate income apply to activities that have an impact on its economies. 

Equivalent to the VAT in France, assimilated to the VAT in the United Kingdom and known as the IVA in Spain, it is levied by entrepreneurs and actors of economic activity. It is levied by entrepreneurs and economic actors and concerns in particular the supply of goods and services. 

Income received outside Andorra is also taxable. If you wish to invest in the Principality, the corporate tax rate varies between 5 and 10% maximum.

Vehicle taxes

While the IGI is the most important tax in the country, other indirect taxes may also be applied. In the case of vehicles, there is no tax that applies to those of Andorran companies. It is 2.5% for the transport of people, except for the transport by cable. But in this case, the service must be offered by a public or parapublic institution. 

Buying a car or importing a vehicle when expatriating is also a good deal. Although the acquisition of a car once in Andorra remains easier. One of the main advantages is that the tax is 4.5% maximum.

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Taxes immobilières

Property taxes

In the Principality, property is not subject to any tax. Nor are they subject to inheritance or transfer taxes. However, there are a few points to keep in mind regarding the sale and purchase of real estate. Two taxes are to be expected for the purchase of a property in Andorra: 1.5% fixed tax on the sale price and 2.5% inheritance tax.

Sales taxes are more variable. They can go from 0 to 15%. This depends mainly on the length of time you have owned the property in question. This applies whether or not you are resident in the Principality.


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