News brief · Taxation

Andorra: no wealth tax and no inheritance tax, a lasting advantage

Andorra applies neither a wealth tax nor inheritance duties. For an estate transfer, this factor weighs more over the long term than the income tax cap, which is far more widely discussed.

By Editorial team · on February 25, 2026

View of Andorra la Vella — Photo: Tiia Monto — Wikimedia Commons (CC BY-SA)

What the principality does not tax

Andorra applies no wealth tax and no inheritance or gift duties. This absence relates to a stock of assets, not to annual flows.

Personal income tax is, moreover, capped at a rate of 10%¹, with a relief below a threshold of €40,000² on income from employment and from economic activities.

Dividends from holdings in Andorran entities are not taxed, at a rate of 0%³, and corporate income tax is set at the general rate of 10%⁴.

The combination of a low cap on income and no taxation of capital explains the principality's appeal to wealthy estates as much as to high earners.

Andorran value added tax is, moreover, one of the lowest in Europe, which lowers the cost of everyday consumption. This advantage is partly offset by the price of housing, which is tight in a principality that physically lacks space.

Why the stock weighs more than the flow

An attractiveness regime relates to annual flows and is limited in time. The absence of inheritance duties relates to an entire estate, and it applies once, at the moment the estate changes hands.

Set against a substantial estate, this difference represents amounts out of all proportion to an annual saving on income.

Andorra shares this characteristic with Monaco, which applies 0%⁵ in the direct line and between spouses, and with Switzerland, whose cantons generally exempt spouses and descendants, at a rate of 0%⁶.

Italy, for its part, applies 4%⁷ in the direct line, with an allowance of €1,000,000⁸ per beneficiary — a very low level compared with the progressive scales used elsewhere in Western Europe.

These parameters are rarely highlighted, because they concern an event that people prefer not to plan for and because they produce no visible effect during the taxpayer's lifetime.

What Andorran residence entails

Andorra belongs neither to the European Union nor to the Schengen area. Staying there requires an authorisation, whatever the applicant's nationality.

Residence without gainful activity rests on an investment in Andorran assets required from €1,000,000⁹ and on a non-refundable payment of €50,000¹⁰ by the main holder to the Andorran Financial Authority.

The holder undertakes to be effectively present for at least 90 days¹¹ per year, which is checked at renewal.

Andorran tax residence, by contrast, is acquired through a presence of more than 183 days¹², or by having the centre of economic interests located in Andorra.

The gap between these two durations is the most poorly understood point of the Andorran file: ninety days preserve the permit, but they are not enough to make tax residence enforceable against France.

Finally, the number of passive residences granted each year is capped, and the entry cost has been raised. The principality is a small territory whose capacity to host newcomers is physically limited, and it embraces a selective admission policy.

What to check

Map your assets by country of location: a property generally remains taxable where it is situated.
Check whether a treaty on inheritances exists; these are far rarer than those covering income.
Distinguish the taxation of the estate from the civil law governing its devolution.
Genuinely move the centre of economic interests, failing which the residence is not enforceable.
Prepare for the exit tax: since Andorra is outside the European Economic Area, the request for deferral must be filed at least from 90 days¹³ before the transfer.

Andorra has, moreover, ended banking secrecy and takes part in the automatic exchange of information. What it offers today is light, transparent taxation, backed by an untaxed transfer of wealth — and it is probably this second element that best justifies a long-term project.

Please note

General information, as of the date shown. A draft reform is not a rule in force: check the conditions with the authorities or a professional before deciding. Terms of use and disclaimers

Sources and verification dates

1.
Andorra: personal income tax rate : 10%
« Article 43. Tipus de gravamen — El tipus de gravamen de l'impost és el 10 per cent. — Llei 5/2014 de l'impost sobre la renda de les persones físiques, art. 43. Article 41 de la Llei 95/2010 de l'impost sobre societats : El tipus general de gravamen per als obligats tributaris d'aquest impost és del 10 per cent. »
portaljuridicandorra.adVerified on Nov 2, 2026Verified source
2.
Andorra: threshold for the reduction on income from employment, economic activities and real estate capital : €40,000
« Article 46. Bonificació per obtenció de rendes del treball, d'activitats econòmiques o del capital immobiliari — L'obligat tributari […] es dedueix de la quota de tributació una bonificació del 50 per cent de la quantitat que resulti d'aplicar el tipus de gravamen de l'impost sobre l'import de la base de tributació general […] minorada en la quantitat corresponent a la reducció prevista en el primer paràgraf de l'apartat 1 de l'article 35 […]. Aquesta bonificació no pot excedir la quantitat de 800 euros. — Llei 5/2014, art. 46. Le plafond de 800 € correspond à 5 % de 16 000 €, soit une base de 40 000 € (24 000 € exonérés + 16 000 €) : au-delà de 40 000 €, le taux plein de 10 % s'applique. »
portaljuridicandorra.adVerified on Nov 2, 2026Verified source
3.
Andorra: taxation of dividends from holdings in Andorran entities : 0%
« Article 5. Rendes exemptes — Estan exemptes de l'impost les rendes següents: […] j) Els dividends i altres rendiments derivats de la participació en el patrimoni net, a què es fa referència a l'apartat 1 de l'article 22, quan siguin satisfets per entitats residents fiscals a Andorra o per organismes d'inversió col·lectiva de dret andorrà sempre que estiguin subjectes a l'impost sobre societats andorrà. — Llei 5/2014 (IRPF), art. 5 j). »
portaljuridicandorra.adVerified on Nov 2, 2026Verified source
4.
Andorra: standard corporate income tax rate : 10%
« El tipus general de gravamen per als obligats tributaris d'aquest impost és del 10 per cent. »
portaljuridicandorra.adVerified on Nov 2, 2026Verified source
5.
Monaco: inheritance and gift tax in the direct line and between spouses : 0%
« Direct filiation between parents and children or spouses0% »
monservicepublic.gouv.mcVerified on Nov 2, 2026Verified source
6.
Switzerland: taxation of inheritances between spouses and, as a rule, to direct descendants : 0%
« En règle générale, les époux et les partenaires enregistrés ainsi que les descendants (enfants et petits-enfants) sont exonérés de cet impôt. — ch.ch, portail officiel de la Confédération, des cantons et des communes, « L'impôt sur les successions en Suisse ». L'impôt sur les successions est cantonal (pas d'impôt fédéral) ; l'AFC précise que les cantons exonèrent le conjoint survivant et, en règle générale, les descendants (dossier « Impôts sur les successions et les donations »). »
ch.chVerified on Nov 2, 2026Verified source
7.
Italy: inheritance tax rate in the direct line and between spouses : 4%
« 4% per i trasferimenti in favore del coniuge o di parenti in linea retta (ascendenti e discendenti), da applicare sul valore complessivo netto eccedente, per ciascun beneficiario, la quota di 1 milione di euro »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
8.
Italy: allowance per beneficiary on inheritances in the direct line : €1,000,000
« 4% per i trasferimenti in favore del coniuge o di parenti in linea retta (ascendenti e discendenti), da applicare sul valore complessivo netto eccedente, per ciascun beneficiario, la quota di 1 milione di euro. — Agenzia delle Entrate, « Imposta di successione – Aliquote e franchigie ». »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
9.
Andorra — passive residence: minimum investment in Andorran assets (Law 2/2026) : €1,000,000
« El titular principal d'una residència sense activitat lucrativa ha d'invertir de forma permanent i efectiva una quantitat d'almenys un milió d'euros (1.000.000 €) en alguna o diverses de les tipologies d'actius que s'indiquen a continuació »
Consell General del Principat d'Andorra, « Llei 2/2026, del 22 de gener, de continuïtat i consolidació de les mesures per al creixement sostenible (BOPA núm. 15, 12 de febrer del 2026) », Jan 22, 2026Verified on Nov 2, 2026Verified source
10.
Andorra — passive residence: definitive payment by the main holder to the AFA (Law 2/2026) : €50,000
« Efectuar un ingrés, a favor de l'Autoritat Financera Andorrana, en el mateix moment en què es presenta la sol·licitud d'autorització d'immigració, d'un import de cinquanta mil euros (50.000 €), el qual s'ingressa amb caràcter definitiu i no és reemborsable, llevat que l'autorització d'immigració inicial sigui denegada. »
Consell General del Principat d'Andorra, « Llei 2/2026, del 22 de gener, de continuïtat i consolidació de les mesures per al creixement sostenible (BOPA núm. 15, 12 de febrer del 2026) », Jan 22, 2026Verified on Nov 2, 2026Verified source
11.
Andorra: annual physical presence to which the holder of a residence without gainful activity commits : 90 days
« Estableixi la seva residència principal i efectiva al Principat d'Andorra durant almenys 90 dies per any natural. »
govern.adVerified on Nov 2, 2026Verified source
12.
Andorra: annual presence giving rise to tax residency : 183 days
« Que romanguin més de 183 dies, durant l'any natural, en el territori andorrà. Per determinar aquest període en territori andorrà es computen les absències esporàdiques, excepte que l'obligat tributari acrediti la seva residència fiscal en un altre país. »
portaljuridicandorra.adVerified on Nov 2, 2026Verified source
13.
France, exit tax: deadline before departure to file a request for deferral with guarantees : 90 days
« Pour les départs intervenus à compter du 22 novembre 2019, la demande doit être déposée au plus tard 90 jours avant le transfert du domicile fiscal hors de France. — Direction générale des finances publiques, impots.gouv.fr. »
impots.gouv.fr