IRPF in Andorra -the Personal Income Tax- is one of the distinguishing features of the Andorran tax system: a tax with rates below the European average, specific deductions, and an annual campaign that, if managed well, can lead to significant tax savings. In this guide, we explain who must file the declaration, how it works, which deductions you can apply, and which errors to avoid.
- What is IRPF in Andorra and who must file it?
Andorran IRPF, regulated by Law 5/2014, of April 24, on Personal Income Tax, taxes the income obtained by individuals who are tax residents in Andorra. Tax residency in the Principality entails the obligation to pay tax on worldwide income.
The following are obliged to file the IRPF declaration:
- All Andorran tax residents who obtain income during the fiscal year.
- Employees whose income exceeds the legally established thresholds (first €24,000 exempt).
- Self-employed individuals and sole proprietors resident in Andorra, regardless of their billing amount.
- Individuals who obtain income from movable or immovable capital subject to tax.
- Taxpayers who have obtained capital gains or losses during the fiscal year.
Important: Non-resident individuals in Andorra who obtain income in the Principality are taxed under the Non-Resident Income Tax, a different tax with a general rate of 10%, which should not be confused with IRPF.
- What tax rates apply to Andorran IRPF?
One of the main attractions of tax residency in Andorra is its competitive personal taxation. The Andorran IRPF system applies, in summary, the following tax brackets to general base income:
- from 0 to 24,000.00 euros: exemption;
- from 24,000.00 euros to 40,000.00 euros: 5%;
- from 40,000.00 euros onwards: 10%.
Note: the specific rates for the exempt minimum and the general base brackets must be validated with our tax team, as they may be updated annually by regulation. Contact us to get the most up-to-date information for your case.
