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Personal Tax

Since January 2015, Andorran authorities have introduced personal taxation. It is a complex structure but you can find a summary below.
Subject to personal tax is anyone whose base of economic activity is Andorra, or who is resident of Andorra for more than 183 days a year.

Taxable income includes all worldwide earnings from:

  1. Income from work, including pensions
  2. Other earned income, e.g. from trading etc.
  3. Income obtained from intellectual and other property rights
  4. Interest and dividends from investments
  5. Capital gains and losses, excluding property

Exempt from any tax burden are:

  1. Juridical awarding, redundancy payments
  2. Academic bursaries
  3. Literary, artistic, scientific or gambling and lottery prizes
  4. Dividends and distributions from Andorran companies, or Government debt
  5. Extraordinary capital gains (definition is not further specified)

The personal general tax rate is 10%.

The following deductions can be made from the General class of income, which also includes pension incomes.

  1. The first 24,000 € are not taxable; this increases to 40,000 € if the spouse does not have any income. Stable partnerships also qualify as spouse.
  2. 750 € per year for each dependent child under 25, with annual income under 12,000 €.
  3. 750 € per year for each dependent parent etc. over 65, with annual income under 12,000 €.
  4. In both cases, the 750 € increases by 50% if the person is disabled.
  5. Up to 1,000 € p.a. invested in the primary home.
  6. Up to 5,000 € p.a. invested in pensions or provisions for social care, for self or spouse.

Other compensation is for income between 24,000 € and 40,000 €, where the tax will be reduced with 50% (i.e. to 5%). However this should not apply to capital gains income.

If the tax base is negative, it will be possible to carry forward the losses and offset the tax liability from income over the subsequent tax years.

There are additional types of deductions other than the basic deductible items above, which includes taxes already paid in other countries.