Andorra vs Netherlands in 2026: Tax Comparison for Entrepreneurs, Investors and Families Leaving the Box System

Written and reviewed by the Axior Global Advisory Team — Andorra-based tax, corporate and residency advisors.

TL;DR: The Netherlands taxes the three things a wealthy family owns — salary, company and savings — in three separate “boxes”, and all three are expensive. Box 1 takes 49.5% of employment and business income above roughly EUR 78,000; Box 2 takes 24.5–31% of dividends and gains on a 5%-plus shareholding, on top of 19–25.8% corporate tax; and Box 3 taxes savings and investments at 36% on a deemed return of around 6% — an annual wealth tax in all but name — with the actual-return system not due until 2028. Inheritance tax runs to 20% for children and 40% for others, and VAT is 21%. Andorra taxes personal income at 0–10%, company profits at a flat 10%, exempts dividends from Andorran companies, charges 0% capital gains after 10 years and 0% wealth, inheritance, gift and exit tax, with IGI at 4.5%. A double taxation treaty is in force between the two countries. The two Dutch rules that shape any move are the exit tax on substantial interests (a protective assessment on the unrealised gain in your company at departure) and the 10-year inheritance-tax tail for Dutch nationals — both manageable, neither avoidable by simply leaving.

Key Facts: Andorra vs Netherlands (2026)

Item Andorra Netherlands
Personal income tax on employment / business income 10% top rate (0% to EUR 24,000; 5% to EUR 40,000; 10% above) Box 1: 35.75% to EUR 38,883; 37.56% to EUR 78,426; 49.50% above
Social security CASS 22% (15.5% employer + 6.5% employee) National insurance included in the first Box 1 bracket; employer contributions on top
Tax on dividends / gains from own company (≥ 5%) 0% on dividends from an Andorran company; gains 0–10% Box 2: 24.5% to approx. EUR 68,800; 31% above
Corporate tax 10% flat (special regimes 2%) 19% to EUR 200,000 profit; 25.8% above
Combined tax on profit extracted by owner 10% approx. 48–49% (25.8% CIT + 31% Box 2 on the remainder)
Tax on savings and investments None on holding; income taxed at max 10% Box 3: 36% on a deemed return (approx. 6% on investments) above a tax-free allowance of approx. EUR 59,000 per person
Capital gains on portfolio investments 0% after 10 years; 10% otherwise No CGT as such — covered by the Box 3 deemed return, whether or not a gain is realised
Wealth tax 0% No formal wealth tax — Box 3 functions as one
Inheritance / gift tax 0% 10–20% partner and children; 18–36% grandchildren; 30–40% others
Exit tax 0% Protective assessment (conserverende aanslag) on unrealised Box 2 gains at emigration; no exit tax on Box 3 assets
VAT 4.5% (IGI) 21% standard; 9% reduced
Tax residency test 183 days, or centre of economic interests Facts-and-circumstances test (home, family, economic ties)
Expat regime Not needed — worldwide income at max 10% 30% ruling (30% of salary tax-free, max 5 years, capped; 27% from 2027 for new arrivals)
Double taxation treaties 22 (Estonia in force 24 March 2026) approx. 95
Andorra–Netherlands DTA In force (signed 12 October 2023) —
Investor residency Passive residency: EUR 1,000,000 investment (or EUR 400,000 Housing Fund) + EUR 50,000 non-refundable AFA contribution + EUR 12,000 per dependant No investor-residency programme (the Dutch investor visa was closed in 2024)

Which Country Has Lower Income Tax: Andorra or the Netherlands?

Andorra: a top rate of 10% against a Dutch Box 1 rate of 49.5% that begins at roughly EUR 78,000 of income. The Netherlands reaches its top bracket earlier than almost any other Western European country, so the gap hits professionals and directors on ordinary salaries as well as high earners.

According to the Portal Jurídic d’Andorra, Llei 5/2014 taxes general income in three bands: 0% on the first EUR 24,000, 5% from EUR 24,000 to EUR 40,000 and 10% above EUR 40,000. Savings income (interest, foreign dividends, financial gains) is taxed at a flat 10% after a EUR 3,000 annual exemption, and dividends from Andorran-resident companies are exempt. Social security (CASS) applies to employment and self-employment income at 22% in total, of which 6.5% is borne by the employee.

Dutch Box 1 applies a combined income-tax-and-national-insurance rate of 35.75% on income up to EUR 38,883, 37.56% up to EUR 78,426 and 49.50% above. Tax credits (the general credit and the labour credit) are phased out as income rises, so the marginal burden on high earners is the full 49.5%. Employers pay social contributions on top.

Annual income (employee) Andorra IRPF Netherlands Box 1 (approx., before credits) Difference
EUR 100,000 EUR 6,800 approx. EUR 39,000 approx. EUR 32,000
EUR 250,000 EUR 21,800 approx. EUR 114,000 approx. EUR 92,000
EUR 500,000 EUR 46,800 approx. EUR 237,000 approx. EUR 190,000
EUR 1,000,000 EUR 96,800 approx. EUR 485,000 approx. EUR 388,000

Andorran figures apply the 0/5/10% bands to the full amount as general income and exclude employee CASS (6.5%). Dutch figures are indicative for a resident under 67, before credits, pension deductions and mortgage-interest relief, and should be checked with a Dutch adviser.

Full detail on the Andorran side is in our guide to Andorra income tax (IRPF).

How Are Business Owners Taxed: Box 2 vs Andorra’s 10%?

A Dutch entrepreneur pays corporate tax of 19–25.8% and then Box 2 tax of 24.5–31% on dividends or on the sale of the company, for a combined burden of roughly 48–49% on extracted profit; an Andorran entrepreneur pays 10% at company level and nothing on the dividend. For an owner-managed business this single comparison usually outweighs everything else.

Andorra’s corporate tax (IS) is a flat 10% under Llei 95/2010, with special regimes at 2% for qualifying activities. Because dividends paid by an Andorran-resident company to an Andorran-resident shareholder are exempt from IRPF (Article 5 of Llei 5/2014), the total tax on profits earned in the company and paid to its owner is 10%. See our guides to the 10% corporate tax and to dividend taxation in Andorra.

In the Netherlands, a BV pays 19% on the first EUR 200,000 of profit and 25.8% above. A shareholder holding 5% or more — a substantial interest (aanmerkelijk belang) — is then taxed in Box 2 on dividends and on the gain when the shares are sold: 24.5% on the first tranche (approx. EUR 68,800 per person, doubled for fiscal partners) and 31% above. On EUR 1,000,000 of BV profit, the arithmetic is approximately EUR 245,000 of corporate tax, EUR 755,000 distributed, and around EUR 230,000 of Box 2 tax — roughly EUR 475,000 in total, against EUR 100,000 in Andorra. Director-shareholders are also subject to the customary-salary rule (gebruikelijk loon), which forces a minimum Box 1 salary before dividends can be taken.

The counterweight is the Dutch participation exemption (deelnemingsvrijstelling), which exempts a BV from corporate tax on dividends and gains from qualifying subsidiaries. It is one of the strongest holding regimes in Europe — but it only defers the problem: the moment profits leave the holding for the shareholder’s pocket, Box 2 applies. Entrepreneurs who want to run a business from Andorra use the active (self-employed) residency route — see our active residency guide.

What Is Box 3, and Why Do Dutch Investors Call It a Wealth Tax?

Box 3 taxes savings and investments at 36% on a deemed return — around 6% a year for investments — whether or not that return is actually earned, which makes it economically a wealth tax of roughly 2% a year on portfolios; Andorra has no equivalent, taxes only real income at a maximum of 10%, and exempts gains on assets held more than 10 years. For a family living off a portfolio, Box 3 is usually the largest recurring Dutch cost.

The mechanism: net assets above a tax-free allowance (approx. EUR 59,000 per person) are split into bank savings, other investments and debts, each attributed a statutory deemed return, and the result is taxed at 36%. On a EUR 5 million investment portfolio the deemed return is roughly EUR 300,000 and the annual Box 3 bill roughly EUR 105,000–110,000 — in a year of flat markets as much as in a good one. Since the Supreme Court’s 2021 and 2024 rulings the Dutch Tax Administration must allow taxpayers to prove a lower actual return (the counter-evidence rule, in force since 2025), and a full actual-return system is scheduled for 2028; but the deemed system remains the default in 2026.

Andorra does not tax the holding of assets. Portfolio income is taxed within IRPF at 10% on the savings base (after the EUR 3,000 exemption), and gains on assets held for more than 10 years are exempt; gains on shareholdings below a statutory participation threshold are exempt without a holding-period requirement. Our guide to when Andorra’s capital gains tax is 0% sets out the rules. A EUR 5 million portfolio yielding 3% in real income costs about EUR 14,700 a year in Andorran IRPF — and nothing at all in years without income.

Does the Netherlands Have an Exit Tax When You Move to Andorra?

Yes, for company owners: on emigration a substantial-interest holder receives a protective assessment (conserverende aanslag) for Box 2 tax on the unrealised gain in the shares, which is not collected immediately but becomes payable if the shares are later sold or profits are distributed; since 2015 it no longer lapses after 10 years. There is no exit tax on Box 3 portfolio assets or on real estate. Andorra has no exit tax of any kind.

The protective assessment values the BV at market value on the day before departure, computes the Box 2 gain over the acquisition cost, and defers payment interest-free (with security in some cases) for as long as the shares are retained and no large distributions are made. Dividends paid after emigration can trigger partial collection, and a sale triggers full collection, regardless of how long the shareholder has lived abroad. The treaty with Andorra allocates taxing rights on the post-emigration increase in value, so careful valuation at departure and documentation of the post-departure growth matter. This is comparable in effect to Germany’s exit-tax rules, and it makes the sequence — restructure, value, emigrate, then grow — the core of the planning. The Belgian side of the border, where no exit tax exists but a capital gains tax has just arrived, deserves a comparison of its own, which we will publish shortly.

Dutch tax residence itself ends on a facts-and-circumstances test (home, family, economic ties), so the move must be real: the Andorran side of that test is the 183-day rule and centre-of-interests test explained in our tax residency guide.

How Do Inheritance and Gift Taxes Compare?

Andorra: 0% on inheritances and gifts. Netherlands: 10–20% for partners and children, 18–36% for grandchildren and 30–40% for everyone else — and a Dutch national who emigrates remains within Dutch inheritance and gift tax for 10 years after leaving. The 10-year tail is the rule most often overlooked by Dutch families moving to Andorra.

Dutch inheritance and gift tax (erfbelasting and schenkbelasting) applies to the worldwide estate of anyone who is a Dutch resident at death or at the time of the gift, with a spouse exemption in the hundreds of thousands and a child exemption of only around EUR 25,000. A EUR 10 million estate left to two children faces roughly EUR 1.9 million of Dutch tax. Business-succession relief (BOR) can exempt a large part of the value of a qualifying operating business, subject to conditions that were tightened in 2024–2026.

Under the deemed-residence rule, a person with Dutch nationality who has emigrated is treated as still resident for inheritance and gift tax purposes for 10 years after departure; non-nationals face a one-year rule for gifts only. An Andorran resident who is Dutch therefore needs to plan lifetime giving and succession structures across a decade, not a tax year. Andorra levies 0% on inheritances, gifts and wealth — see our guide to Andorra’s 0% wealth, inheritance and gift tax — so the Andorran side of the plan is simple; the Dutch side is where advice is needed.

Is There a Double Tax Treaty Between Andorra and the Netherlands?

Yes. The Andorra–Netherlands convention, signed on 12 October 2023, is in force and forms part of Andorra’s network of 22 treaties. For a Dutch family moving to Andorra it settles three things: which country is the treaty residence when both claim the individual, how Dutch-source income is taxed after the move, and how the exit-tax gain is allocated.

The treaty follows the OECD model: the tie-breaker (permanent home, centre of vital interests, habitual abode, nationality) determines a single residence; Dutch dividends remain subject to Dutch withholding at a treaty-reduced rate, creditable against Andorran IRPF; Dutch real estate stays taxable in the Netherlands; and pensions and directors’ fees follow the treaty’s specific articles. Andorra’s network reached 22 when the Andorra–Estonia convention entered into force on 24 March 2026 — see our Estonia treaty article. Because Andorran rates are so low, the practical exposure after the move is Dutch tax on Dutch-source income (rental income, Dutch dividends, the protective assessment) rather than double taxation of the same euro.

How Do Residency Routes Compare?

A Dutch citizen has no automatic right to live in Andorra, which is not in the EU, and applies under the same rules as any other nationality: passive residency for investors or active residency for entrepreneurs, both governed in 2026 by Llei 2/2026. The Netherlands, for its part, no longer offers an investor visa.

According to the BOPA (Llei 2/2026, Omnibus Law 2, in force since 13 February 2026), Andorran passive residency requires an investment of EUR 1,000,000 in Andorran assets (real estate at a minimum of EUR 800,000 per property, Andorran financial instruments or other qualifying assets), or EUR 400,000 where the investment is made in the national Housing Fund; a EUR 50,000 non-refundable contribution to the AFA — no longer a refundable deposit — plus EUR 12,000 per dependant; private health, disability and pension cover; and at least 90 days a year in the Principality. Buyers of real estate pay the foreign real-estate investment tax (IEI) at 6% on a first property and 10% on additional ones. Full requirements and the process are in our passive residency guide; entrepreneurs use the active residency route. Every 2026 change is tracked in our pillar hub, Andorra Law & Tax Changes in 2026.

Who Should Choose Andorra Over the Netherlands?

Business owners planning to extract profits or sell, investors living off a portfolio that Box 3 taxes whether or not it performs, and families planning succession all pay dramatically less in Andorra. The Netherlands keeps its advantages for operating businesses that need EU market access, the participation exemption for international holding structures, and the 30% ruling for incoming employees.

Choose Andorra if Box 2 stands between you and the proceeds of your company, if Box 3 is taxing returns you are not earning, if inheritance tax at 20% on your children’s share is a concern, or if you want a simple worldwide system — 10% maximum, no wealth tax, no exit tax — with a defined investor route.

The Netherlands remains the better base for a business that must sit inside the EU single market, for a group holding whose value lies in the participation exemption and treaty network, and for internationally mobile employees who qualify for the 30% ruling and will leave before Box 3 matters. Compare our neighbouring analysis in Andorra vs Spain for Dutch families who are also weighing a move south.

Frequently Asked Questions

1. What is the top income tax rate in Andorra compared with the Netherlands?
Andorra’s top IRPF rate is 10% (above EUR 40,000). The Dutch Box 1 top rate is 49.5%, applying above roughly EUR 78,000.

2. Does the Netherlands have an exit tax if I move to Andorra?
For holders of a 5%-plus shareholding, yes: a protective assessment for Box 2 tax on the unrealised gain at departure, collected on a later sale or distribution and no longer lapsing after 10 years. There is no exit tax on portfolio assets. Andorra has no exit tax.

3. What is Box 3 and does Andorra have anything similar?
Box 3 taxes net savings and investments at 36% on a deemed return of around 6%, regardless of actual performance. Andorra has no wealth tax and no deemed-return regime; it taxes actual savings income at 10% and exempts gains after 10 years.

4. Is there a double tax treaty between Andorra and the Netherlands?
Yes. The convention signed on 12 October 2023 is in force and is one of Andorra’s 22 treaties.

5. How is inheritance taxed in the Netherlands versus Andorra?
The Netherlands charges 10–20% for partners and children, up to 40% for others, and keeps Dutch nationals within its inheritance and gift tax for 10 years after emigration. Andorra charges 0%.

6. Can a Dutch citizen get residency in Andorra?
Yes, on the same terms as other non-Andorran nationals: passive residency (EUR 1,000,000 investment or EUR 400,000 Housing Fund, plus EUR 50,000 AFA contribution and EUR 12,000 per dependant) or active residency through an Andorran company.

7. What happens to my BV if I move to Andorra?
The BV remains Dutch-resident and taxable in the Netherlands unless its effective management moves; the protective assessment fixes your Box 2 position at departure; and future dividends are subject to Dutch withholding at the treaty rate, creditable in Andorra. Restructuring before departure is usually worth examining.

8. How much would a EUR 5 million portfolio cost in tax each year?
Approximately EUR 105,000–110,000 in Dutch Box 3 tax regardless of return (unless a lower actual return is proven). In Andorra, 10% of the actual income only — about EUR 14,700 at a 3% yield, and nothing in a year without income.

Run Your Own Andorra vs Netherlands Comparison

The gap between the Dutch box system and Andorra’s 10% ceiling is wide, but the value of a move turns on the protective assessment on your company, the 10-year inheritance-tax tail and the timing of any sale. Use our free Andorra tax assessment to model your salary, dividends and portfolio under Andorran rules, then book a free consultation with Axior Global to plan the sequence with your Dutch adviser.

Sources

Related Axior guides: Andorra Law & Tax Changes in 2026 (pillar hub) · Andorra vs Spain · Andorra Passive Residency · Andorra Corporate Tax · Andorra Capital Gains Tax · Andorra Wealth, Inheritance & Gift Tax · Andorra Tax Residency (183-day rule) · Andorra–Estonia Double Tax Treaty.

This article is for general information only and does not constitute tax or legal advice. Andorran figures reflect law as of September 2026 and should be verified against the Portal Jurídic and the BOPA; Dutch figures should be verified against the Belastingdienst and the Belastingplan in force before acting.

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