TL;DR: Andorra is one of the most investor-friendly jurisdictions in Europe for capital gains in 2026. Gains are taxed within the personal income tax (IRPF) framework, which is capped at 10% — and in many common situations the effective rate is 0%. According to Llei 5/2014 (the Andorran IRPF law), gains on the sale of shares are exempt when you hold less than 25% of the company. Real estate gains are taxed on a sliding scale that declines with the holding period and reaches 0% after 10 years of ownership. Add no wealth tax, no inheritance or gift tax, and no exit tax, and long-term investors can build and pass on wealth in Andorra with a structurally lighter tax bill than almost anywhere in Europe. Becoming eligible requires Andorran tax residency — typically via passive residency (EUR 1,000,000 minimum investment under Law 2/2026) or an active route.
Key Facts: Capital Gains in Andorra (2026)
| Item | Rule in Andorra (2026) |
|---|---|
| Maximum tax on capital gains | 10% (within IRPF, Llei 5/2014) |
| Sale of shares, holding <25% of company | 0% — exempt |
| Real estate gains after 10-year holding | 0% |
| Real estate gains, shorter holding | Sliding scale, declining with each year held |
| Wealth tax | 0% — does not exist |
| Inheritance / gift tax | 0% — does not exist |
| Exit tax | 0% — does not exist |
| IRPF general structure | 0% to EUR 24,000; 5% EUR 24,000–40,000; 10% above |
| Double tax treaties in force | 21 |
| Tax residency threshold | 183+ days or centre of economic interests in Andorra |
How Are Capital Gains Taxed in Andorra?
Capital gains in Andorra are taxed within the personal income tax (IRPF) framework at a maximum rate of 10% — and several broad exemptions bring the rate to 0% in common scenarios. According to Llei 5/2014, Andorra’s IRPF law, there is no separate, higher “capital gains tax” schedule of the kind found in France, Spain or the UK. Investment gains sit inside the same system that exempts the first EUR 24,000 of income, taxes EUR 24,000–40,000 at 5%, and applies 10% above that.
This design matters more than the headline rate suggests. In most high-tax European countries, capital gains are taxed on a dedicated scale that climbs well above the ordinary top rate threshold — Spain’s savings scale reaches 30%, France’s flat tax is 30%, and the UK taxes gains at up to 24% on top of income already taxed at up to 45%. In Andorra, 10% is the ceiling for everything, and the exemptions described below frequently reduce the effective rate on gains to zero.
When Do You Pay 0% on Share Sales?
You pay 0% on the sale of shares when your stake represents less than 25% of the company. According to Llei 5/2014, gains from transferring shares or other equity interests are exempt from IRPF where the seller’s participation in the entity (together with related parties) did not exceed 25% during the relevant period.
For a typical private investor, this exemption covers almost everything: listed equities, ETFs, index funds and minority positions in private companies all normally fall below the 25% threshold. A portfolio investor resident in Andorra can therefore realise gains on a global equity portfolio at an effective rate of 0%, year after year, entirely within the law.
Where the stake exceeds 25% — a founder selling their company, for example — the gain falls within IRPF at the standard rates, capped at 10%. Even in that scenario, a founder exiting a business in Andorra keeps roughly 90% of the gain, against roughly 66–74% in Spain and often less in France once social charges are counted.
How Much Is Capital Gains Tax on Andorran Real Estate?
Real estate gains in Andorra are taxed on a sliding scale that declines the longer you hold the property, reaching 0% after 10 years of ownership. Property gains have their own regime, separate from the share exemption, designed to discourage short-term speculation while leaving long-term owners untaxed.
The practical rule for planning purposes is simple: sell within the first years and you pay tax on the gain at rates that decrease with each year held; hold the property for more than 10 years and the gain is tax-free. For families acquiring a primary residence as part of a relocation — remember that passive residency requires a property purchase of at least EUR 800,000 if the real estate route is used — the 10-year clock usually expires long before any sale is contemplated, making the eventual gain untaxed.
Note that taxation of the purchase is separate: since Law 2/2026 reforms, foreign investment in Andorran real estate bears the IEI (foreign investment tax) at 6% on a first property and 10% on additional properties. That is an acquisition cost, not a capital gains tax, but it belongs in any honest calculation of round-trip property returns.
What About Dividends, Interest and Fund Income?
Investment income other than gains also enjoys favourable treatment, always within the 10% IRPF ceiling. Dividends from Andorran companies are exempt at the shareholder level, since profits have already borne Andorran corporate tax (IS) at the flat 10% rate (special regimes as low as 2%). Foreign dividends and interest fall within IRPF at the standard structure — 0% up to EUR 24,000 of income, 5% to EUR 40,000, 10% above — meaning a resident living on modest portfolio income may owe little or nothing at all.
Andorra’s network of 22 double tax treaties in force helps manage foreign withholding taxes on dividends and interest, and treaty relief or foreign tax credits generally prevent double taxation on cross-border investment income.
Does Andorra Have a Wealth Tax, Inheritance Tax or Exit Tax?
No. Andorra levies no wealth tax, no inheritance tax, no gift tax and no exit tax — all four are 0% because the taxes simply do not exist in Andorran law. This is where Andorra’s advantage becomes structural rather than a matter of rates.
A capital gains rate only tells you what happens when you sell. Wealth taxes tax you for owning; inheritance and gift taxes tax you for transferring; exit taxes tax you for leaving. Spain applies a wealth tax and a solidarity tax on large fortunes. France taxes real estate wealth annually. Most of Europe taxes inheritances. Andorra does none of this. An investor can hold a portfolio untaxed, realise long-term gains at 0%, gift assets to children at 0%, and — should circumstances change — leave the country without an exit charge.
Who Qualifies for Andorra’s Capital Gains Treatment?
Only Andorran tax residents benefit from this regime, and tax residency generally requires spending more than 183 days per year in Andorra or having your centre of economic interests there. Non-residents cannot simply route sales through Andorra to escape their home country’s capital gains tax; the gain is taxed where you are resident.
The two main routes to residency are:
Passive residency (residència per inversió). According to the Omnibus Law 2 reforms (Law 2/2026), passive residency requires a minimum investment of EUR 1,000,000 in Andorran assets, which includes a non-refundable EUR 50,000 deposit-fee to the AFA (Andorran Financial Authority) plus EUR 12,000 per dependent. The investment can include real estate of at least EUR 800,000, or alternatively a EUR 400,000 contribution to the national housing fund alongside other qualifying assets. Passive residents must spend at least 90 days per year in Andorra for immigration purposes — but to be tax resident and enjoy the 0%/10% treatment, the 183-day / centre-of-interests test is what counts.
Active residency. Entrepreneurs and professionals who form an Andorran company or work in the country obtain residency through economic activity, with a far lower capital outlay. They are typically full tax residents from the start.
For a detailed breakdown of both routes, see our guides to Andorra passive residency and active/self-employed residency.
How Does Andorra Compare with Other European Jurisdictions on Capital Gains?
Andorra’s worst case — 10% — is lower than the best general rate in most of Western Europe, and its common case is 0%. Spain taxes savings income and gains at 19% to 30%. France applies a 30% flat tax (prélèvement forfaitaire unique) on investment income. The UK charges up to 24% on gains. Germany applies roughly 26.4% including surcharge. Italy taxes most financial gains at 26%.
Some jurisdictions do offer 0% in specific situations — Belgium and Switzerland exempt many private share gains, Monaco levies no income tax at all — but each comes with trade-offs: Switzerland taxes wealth annually, Monaco demands far higher living and property costs, and Belgium’s exemption depends on gains being “normal management of private wealth”. Andorra combines a 0%/10% gains regime with no wealth tax, no inheritance tax, 4.5% IGI (VAT) and a corporate rate of 10% — a package none of those jurisdictions matches in full.
Frequently Asked Questions
What is the capital gains tax rate in Andorra in 2026?
The maximum rate is 10%, because capital gains fall within Andorra’s IRPF, which is capped at 10%. In many cases the effective rate is 0%: share sales are exempt when the holding is below 25% of the company, and real estate gains are exempt after 10 years of ownership.
Do I pay tax when I sell stocks or ETFs as an Andorran resident?
Usually not. According to Llei 5/2014, gains on shares are exempt when your stake is under 25% of the issuer — which covers virtually all listed stocks, ETFs and funds held by private investors. Larger stakes are taxed within the 10% IRPF ceiling.
When is real estate capital gain tax-free in Andorra?
After 10 years of ownership. Gains on property sold earlier are taxed on a sliding scale that decreases with each year held; once the holding period exceeds 10 years, the rate reaches 0%.
Does Andorra tax wealth, inheritances or gifts?
No. Andorra has no wealth tax, no inheritance tax, no gift tax and no exit tax. Combined with the 0%/10% capital gains regime, this makes Andorra one of the most efficient European jurisdictions for holding and transferring family wealth.
Do I need to live in Andorra to benefit from these rules?
Yes. The regime applies to Andorran tax residents — generally those spending more than 183 days per year in the country or having their centre of economic interests there. Residency is obtained via passive residency (EUR 1,000,000 minimum investment under Law 2/2026) or an active route such as company formation.
Is Andorra’s 0% capital gains treatment legal and internationally accepted?
Yes. Andorra is not on the EU list of non-cooperative jurisdictions, exchanges tax information under international standards, and has 22 double tax treaties in force. The exemptions are written into domestic law (Llei 5/2014) and available to any bona fide tax resident.
How Much Could You Save?
The difference between paying 26–30% on gains in a high-tax country and 0–10% in Andorra compounds dramatically over an investing lifetime. Use our Andorra Tax Savings Calculator to estimate your personal savings on income, gains and wealth taxes.
If you are considering relocating an investment portfolio, a business exit or your family’s wealth to Andorra, book a free consultation with our advisory team. Axior Global has guided high-net-worth individuals and families through Andorran residency and tax planning since 2018.
Sources
- Portal Jurídic del Principat d’Andorra (compendi oficial de la legislació vigent): https://www.portaljuridic.ad
- Llei 5/2014, del 24 d’abril, de l’impost sobre la renda de les persones físiques (IRPF) — BOPA: https://www.bopa.ad
- Law 2/2026 (Omnibus Law 2) — foreign investment and passive residency reform — BOPA: https://www.bopa.ad
- Govern d’Andorra — Departament de Tributs i de Fronteres: https://www.impostos.ad
- Autoritat Financera Andorrana (AFA): https://www.afa.ad
- Consell General del Principat d’Andorra: https://www.consellgeneral.ad
This article is for general information only and does not constitute tax or legal advice. Tax outcomes depend on individual circumstances. Always seek personalised advice before acting.