Andorra Personal Tax Guide: Progressive PIT 0%/5%/10% 2026
Andorra applies a progressive personal income tax (PIT) with rates of 0%, 5%, and 10%. The first €24,000 of annual income is tax-free. Income from €24,001 to €40,000 is taxed at 5%, and income above €40,000 is taxed at 10%. Here is how Andorran personal tax works in 2026.
Personal Income Tax in Andorra (Impost sobre la Renda de les Persones Físiques — IRPF) is governed by the consolidated tax code and administered by the Ministeri de Finances — Departament de Tributs i Fronteres. The tax year is the calendar year. Andorra operates a territorial tax system — residents are generally taxed only on Andorran-source income, not worldwide income. This makes Andorra exceptionally attractive compared to Spain (progressive 19-47%) and France (progressive 0-45%). Check residency rules →
Real-world example: An employee earning €50,000 per year pays 0% on the first €24,000 = €0, 5% on the next €16,000 (€24,001-€40,000) = €800, and 10% on the remaining €10,000 (€40,001-€50,000) = €1,000. Total PIT: €1,800. Effective tax rate: 3.6%. Compare this to Spain where the same income would incur approximately €9,000-€12,000 in income tax (effective rate 18-24%). Social contributions are separate →
Personal Income Tax Rates 2026
- 0% — Annual income up to €24,000 (tax-free threshold)
- 5% — Annual income from €24,001 to €40,000
- 10% — Annual income above €40,000
The progressive bands apply to employment income, business income for individuals, and other personal income. There is no separate surtax or solidarity contribution. Married couples may file jointly in some circumstances but the tax-free threshold applies per individual.
Taxable Income Categories
Andorran PIT applies to several categories of income:
- Employment income: Salaries, wages, bonuses, allowances, benefits-in-kind — all subject to progressive PIT via payroll withholding
- Business income: Self-employed individuals and sole proprietors are taxed at progressive PIT rates
- Rental income: Income from property leasing is taxed at progressive PIT rates after allowable deductions
- Investment income: Dividends, interest, and royalties may have separate withholding tax rates (see investment income guide)
- Capital gains: Gains on real estate have separate CGT rules (see capital gains guide)
Employment income is subject to monthly withholding by the employer. The employer deducts PIT and social security contributions before paying the net salary. Annual filing requirements →
Tax Credits and Deductions
Andorra offers several deductions for individuals:
- General deduction: The €24,000/year threshold serves as the primary personal allowance
- Social security contributions: CASS contributions (general + health branches) are deductible from taxable income
- Mortgage interest: Interest on primary residence mortgage may be deductible within limits
- Health insurance premiums: Private health insurance premiums may qualify for deduction
- Charitable donations: Donations to registered non-profits are deductible up to a percentage of income
- Family deductions: Deductions for dependent children and elderly dependents
Tax deductions generally require documented expenses and are subject to annual limits. The Departament de Tributs i Fronteres provides specific guidelines on allowable deductions.
Social Security Contributions
Employees in Andorra contribute to the CASS (Caixa Andorrana de Seguretat Social) system. The rates for 2026 are:
- Employee share: ~6.5% of gross salary (3% general branch + 3.5% health branch)
- Employer share: ~14.5% of gross salary (8.5% general branch + 6% health branch)
- Contribution cap: Approximately €4,000 per month of insurable income
Contributions are calculated on gross salary up to the cap. The employer withholds and remits both portions to CASS. Detailed CASS guide →
Who must file an Andorran personal tax return?
Individuals with employment income only (where tax was fully withheld at source) generally do not need to file. Self-employed individuals, those with multiple income sources, or those earning above certain thresholds must file an annual return by April 30. Non-residents with Andorran-source income must also file.
Is Andorra a territorial tax system?
Yes. Andorra generally taxes only income sourced within Andorra. Foreign-source income earned by Andorran residents is typically not subject to Andorran tax, with some exceptions for certain passive income. This territorial system is a major advantage for residents with international income.
Is there a wealth tax in Andorra?
No. Andorra does not impose a wealth tax, net worth tax, or solidarity tax on individuals. See the wealth tax guide for details. Wealth tax guide →