Andorra Capital Gains & Investment Tax Guide for 2024

The microstate complements its sky-high landscapes with down-to-earth tax rates, hovering between 0% and 10%.

andorra capital gains

Over the past decade, Andorra has become a sanctuary for Europeans and other nationalities seeking refuge from increasingly higher taxes in their home countries. Year by year, the small principality draws thousands of expatriates, and many of these newcomers invest in different asset classes, such as shares, ETFs, real estate, and cryptocurrencies. But how does Andorra tax those investments?

Perhaps not surprisingly, Andorran tax law is very attractive to investors. In Andorra, capital gains from selling shares are exempt from taxation, and real estate gains are also tax-exempt after 12 years of property ownership. Dividends, interest, cryptocurrency profits, and other types of investment income face a modest 10% tax. This positions Andorra among the lowest in Europe for investment income tax rates. Below, we’ll cover the rules in detail, and with that knowledge, filing your taxes will hopefully be as pleasant as a hike in the Pyrenees.

Also, if you’re considering moving to Andorra, the residency cost has risen recently, but the overall cost of living is still lower than in many other European countries. Property and rental prices, although increasing like elsewhere, are still lower than in cities like Madrid or Lisbon. At first glance, the “entry costs” might seem higher, but Andorra’s low personal and corporate taxes, combined with its low social contributions, indirect taxes, and low consumption taxes (VAT), translate into significant savings over time.

👋 A necessary disclaimer: Although we use primary sources such as government websites to back up what we write, this article shouldn’t be viewed as official tax or legal advice. Think of it as a handy introduction to the country and its tax system. If you have any doubts, always talk to a certified specialist to figure out what you should do based on your unique circumstances.

Overview of capital gains and investment taxes in Andorra

In Andorra, financial investment income is either tax-exempt or taxed at 10%, while capital gains on property are taxed from 15% to 0% depending on how long you owned the property. The rules and tax percentages are primarily defined by the Andorran Income Tax Law.1 Here is an overview:

  • Stocks, ETFs and mutual funds: Capital gains from the sale of stocks and funds are tax-free if you own less than 25% of the shares of the company or fund.
  • Real estate: If a property is sold within the first year, the tax rate is 15%. This rate reduces to 13% if the property is held for more than a year but less than three years. After the third year, the rate further declines to 10%. Following this, there is a gradual decrease of 1% per year until the tax rate eventually reaches 0%.
  • Dividends: Dividends from Andorran companies are exempt from tax, while dividends from non-resident companies are taxed at 10%.
  • Bonds and interest: Income from bonds, bank interest, and fixed income securities is taxed at 10%.
  • Cryptocurrency: Gains from trading in cryptocurrencies are subject to a 10% income tax rate in Andorra.
  • Derivatives: Capital gains from derivatives products, such as CFDs, forex, options, and futures, are taxed at 10%.
  • Wealth, inheritance, gifts: Andorra has no wealth tax (or tax on net assets), inheritance tax or gift tax.

These rules make Andorra a very attractive location for investors and traders, especially those interested in equity and investment fund holdings, due to the tax exemptions and low rates on various other types of investment income.

Capital gains tax on stocks, ETFs, and mutual funds in Andorra

A capital gain is when you sell an investment for more than what you initially paid for it. For example, if you bought 100 shares of Microsoft at one price and later sold them at a higher price, the difference between these two prices is your capital gain. This principle applies to any profit you make from selling investments, whether they’re individual stocks or fund shares.

In Andorra, capital gains on shares, ETFs, and mutual funds are treated very favourably. According to Article 5 of the Andorran Income Tax Law, any profit or loss you make from selling shares in a company or a pooled investment fund, like an ETF or mutual fund, is exempt from tax in Andorra.

The exemption applies only if you, alone or with family members, didn’t own more than 25% of the company’s share capital, profits, or voting rights for at least a year before you sold your shares. However, even if you own more than 25% of the company, you could still be exempt if you held these shares for over 10 years before selling them.

Example 1: Realising a gain from public shares

In 2015, you purchased 100 shares of Microsoft Corp at €40 each, totalling an investment of €4,000. In 2023, you sold these shares at €300 each, totalling €30,000. This resulted in a capital gain of €26,000, excluding broker commissions and other fees. Since you owned less than 25% of Microsoft, this profit would not be taxed.

Example 2: Incurring a loss

In 2021, you bought 100 shares of PayPal Holdings Inc at $300 per share, amounting to $30,000. In 2023, you sold your PayPal shares at $60 per share, receiving only $6,000. This resulted in a loss of $24,000. Since you owned less than 25% of the company’s shares, those losses were exempt, or “ignored”, for tax purposes, meaning you wouldn’t have been able to use them to offset other taxable income.

Example 3: Gains from the sale of private company shares

In September 2013, you co-founded a company that turned out to be quite successful. In 2023, you are given the opportunity to sell your shares and exit the company. During those ten years, your ownership was 50%. If you decide to sell your shares in August 2023, this sale will be subject to taxation. However, if you hold off until October to sell your ownership stake, your gain would most likely be tax-exempt.

Capital gains tax on real estate in Andorra

When you acquire property and sell it later, you will make a capital gain or incur a capital loss from that sale. Andorra, just like most European countries, has very generous tax rules and exemptions for capital gains on personally owned property and primary residences, but there are specific rules you need to know.

Real estate capital gains tax rates

Selling a property in Andorra may attract capital gains tax depending on how long you’ve owned the property. For a property held for a year or less, the tax is up to 15%. This rate decreases every year, dropping to 0% after 12 years.2 The tax rates are as follows:

  • Up to one year: 15%
  • More than one year and one day, up to two years: 13%
  • More than two years and one day, up to three years: 10%
  • More than three years and one day, up to four years: 9%
  • More than four years and one day, up to five years: 8%
  • More than five years and one day, up to six years: 7%
  • More than six years and one day, up to seven years: 6%
  • More than seven years and one day, up to eight years: 5%
  • More than eight years and one day, up to nine years: 4%
  • More than nine years and one day, up to ten years: 3%
  • More than ten years and one day, up to eleven years: 2%
  • More than eleven years and one day, up to twelve years: 1%
  • Over twelve years: 0%

The Andorran government introduced capital gains tax on property transfers in 2006 in an effort to discourage real estate flipping. Despite their intention, property prices have still risen sharply throughout the principality.

Exemption for main residences

If you sell your primary residence in Andorra and reinvest the sale proceeds in a new primary home within a year, you can qualify for a capital gains tax exemption. The exemption is available for Andorran citizens or foreigners with at least five years of permanent residency in Andorra. The property must have been your home for at least four continuous years.

Property transfer tax

When purchasing property in Andorra, buyers must pay a 4% property transfer tax called the Impuesto Indirecto de Transmisiones Patrimoniales (ITP). This tax is shared between the government and the parish, with the current distribution being 1% to the state and 3% to the respective parish. Additionally, a 1% fee is payable to the notary’s office based on the sale price.

There are exceptions to the property transfer tax, including in case of transfers between spouses and close relatives up to the third degree, such as between parents and children or uncles and nephews, where such transfers can be tax-exempt. 

Is Andorra a good place for investors?

Undoubtedly, yes. Andorra not only has low tax rates; it also provides practical benefits such as trustworthy banks and some of the fastest internet speeds in Europe, with fibre throughout the whole country. On the socio-economic front, Andorra ranks well in almost every category, including for its safety, surpassing Spain and Portugal’s safety levels. 

1. Euro and currency conversion

Andorra’s economy runs on the euro. This is convenient if you’re coming from the Eurozone, as it cuts out any currency conversion fees. For those coming from different currencies, like US dollars, exchange mark-ups to euros are typically low due to the pair’s high liquidity. 

Traders will also find an advantage here: many non-European large-cap stocks, including many US companies, are listed on European exchanges, meaning conversion fees and risk, to some degree, can be avoided. Other assets, like derivatives and cryptocurrencies, are typically also tradeable in EUR pairs. 

2. Banking options and bank safety

Your default Andorran bank account will be in EUR, but you can also open a USD and other foreign currency accounts. There are only three banks in the country, Andbank, Creand, and Morabanc, which admittedly isn’t good for competition or innovation, but they support multiple currencies and have some of the highest solvency ratios in Europe. Andorra is in the SEPA zone.3

Depositor protection is in line with the European average, with coverage up to 100,000 euros per depositor per bank, and in special cases, up to 300,000 euros.4

3. Foreign (non-Andorran) banking

Expats in Andorra often keep their bank accounts back home in addition to their local Andorran account. For example, Spanish business people living in Andorra typically hold on to their Spanish bank accounts, especially if they have Spanish and European customers. 

There’s no rule stopping banks in the EEA, EFTA, and the US from providing banking to Andorran residents; if a bank doesn’t allow it, it’s because of the bank’s own policies, not the law.

4. High-speed fibre internet

Andorra Telecom provides almost every household with fibre optic internet. Andorra Telecom has also been rolling out 5G across most urban areas, and it aims for nationwide coverage eventually. 

High-speed internet is a boon for everyone, especially for traders and analysts who rely on fast speeds, but it’s also great for remote workers and business owners. Basically, if you’re in Andorra and your work is online, you’re well-covered.

5. Decent brokerage choice

Since Andorra isn’t part of the EU, you won’t have access to some newer online brokers like DEGIRO. However, as of writing, there are still plenty of international brokerage services available, like Interactive Brokers and TradeStation. 

Many local brokers will also allow you to keep your investment account even after you move to Andorra. As a last resort, you can always invest through your bank, though it will typically be expensive.


  1. Official Gazette of the Principality of Andorra. “Law 5/2014, of April 24, on the taxation of physical persons.”
  2. Official Gazette of the Principality of Andorra. “Law 21/2006, of December 14, on the tax on capital gains from real estate transfers.”
  3. Associació de Bancs Andorrans. “The Andorran financial sector in figures.” Accessed 4 December 2023
  4. Andorran Financial Authority (AFA). “Guarantee Schemes.” Accessed 4 December 2023