Andorra Wealth, Inheritance & Gift Tax in 2026: Why HNWIs Pay 0%

TL;DR: In 2026 Andorra levies no wealth tax, no inheritance tax, no gift tax and no exit tax — all four stand at 0%. There is no annual charge on net worth, no tax when assets pass to heirs, no tax when assets are given away during your lifetime, and no charge for leaving the country. On top of this, personal income tax (IRPF) is capped at 10%, corporate tax (IS) is a flat 10%, VAT (IGI) is just 4.5%, and capital gains reach 0% after a 10-year holding period. For high-net-worth individuals (HNWIs) holding substantial portfolios, real estate or family businesses, this combination is the core reason Andorra has become a serious base in Europe. The trade-off is that residency requires real commitment — EUR 1,000,000 for passive residency or roughly EUR 50,000 for the self-employed route.

Key Facts: Andorra Standing Taxes on Wealth (2026)

Tax Andorra rate (2026) Notes
Wealth tax (net worth) 0% No annual tax on global net assets
Inheritance tax 0% No tax on assets passing to heirs
Gift tax 0% No tax on lifetime gifts
Exit tax 0% No charge for ceasing Andorran residency
Capital gains (general) up to 10%, 0% after 10-year holding Within IRPF framework
Personal income tax (IRPF) 0–10% 0% to EUR 24,000; 5% EUR 24–40k; 10% above EUR 40k
Corporate tax (IS) 10% flat Special regimes as low as 2%
VAT (IGI) 4.5% One of the lowest in Europe
Passive residency investment EUR 1,000,000 Llei Òmnibus 2 (Llei 2/2026)
State deposit (passive) EUR 50,000 non-refundable Per main applicant

Does Andorra Have a Wealth Tax?

No. Andorra has no wealth tax in 2026. There is no annual levy on your net worth — no charge based on the total value of your investment portfolio, real estate, cash, business holdings or other assets. This is one of the defining features of the Andorran tax system and a direct contrast with several large European countries that tax accumulated wealth year after year.

For an HNWI, the absence of a wealth tax compounds over time. In a jurisdiction that charges even a modest annual percentage on net assets, a large portfolio is eroded every single year regardless of whether it produces income. In Andorra, the value you hold is not taxed simply for existing. Spain, for example, applies a wealth tax (Impuesto sobre el Patrimonio) on net assets above roughly EUR 700,000, plus a national solidarity tax on fortunes above EUR 3 million — Andorra applies neither.

Does Andorra Have an Inheritance Tax?

No. Andorra levies no inheritance tax. When assets pass to heirs on death, Andorra does not impose a succession tax on the transfer. For families planning the orderly handover of an estate — a portfolio, a property, or shares in a family company — this removes one of the largest frictions found in many European succession systems, where heirs can face substantial bills simply to inherit.

This matters most for HNWIs whose wealth is concentrated in illiquid assets such as real estate or an operating business. In jurisdictions with high inheritance tax, heirs sometimes have to sell part of an estate just to pay the tax due. Andorra’s 0% inheritance regime means succession can be planned around the family’s actual wishes rather than around a tax liability. Note that Andorra’s domestic position does not change how other countries tax assets located on their territory or heirs resident elsewhere — cross-border estates still need proper planning.

Does Andorra Have a Gift Tax?

No. There is no gift tax in Andorra. Assets transferred during your lifetime — to children, family members or others — are not subject to a specific Andorran gift tax. Combined with the absence of inheritance tax, this gives families genuine flexibility over when and how to pass wealth between generations, rather than being pushed toward a particular timing by tax rules.

For HNWIs who prefer to transfer assets gradually and during their lifetime — to involve the next generation in managing a portfolio or business, for example — the 0% gift treatment is a meaningful planning advantage. As with inheritance, the Andorran position is only one part of the picture for cross-border families: if the giver or recipient is connected to another country, or the asset sits abroad, that country’s rules may still apply.

Does Andorra Have an Exit Tax?

No. Andorra does not impose an exit tax. If you later cease to be an Andorran tax resident, the country does not charge a departure tax on the unrealised gains in your portfolio or other assets. This is a notable contrast with several European systems that have introduced exit taxes specifically to capture latent gains when wealthy residents leave.

For internationally mobile individuals, the absence of an exit tax is reassuring: it means Andorra does not penalise a future change of circumstances. You are free to arrive, build, and — if your life later takes you elsewhere — leave without an Andorran departure charge. That said, the country you move to may have its own rules on arrival, so any future relocation should still be planned.

What About Capital Gains Tax in Andorra?

Andorra taxes most capital gains within its income tax framework at a maximum of 10%, and gains can fall to 0% after a 10-year holding period. There is no separate punitive capital gains regime sitting on top of the income tax cap. For long-term investors and property owners, the 10-year horizon is significant: assets held for the long run can ultimately be realised without an Andorran gains charge.

This long-term-holding relief fits naturally with the wider profile of the system. An HNWI building a base in Andorra is typically holding assets for years, not trading in and out, so the combination of a 10% ceiling on shorter-term gains and 0% on long-held assets is well suited to patient capital. Because the precise treatment depends on the asset type and holding period, the exact position on any specific disposal should be confirmed with an adviser before acting.

How Do the Income, Corporate and VAT Rates Fit In?

The zero-rated wealth, inheritance, gift and exit taxes sit on top of an already low headline system. According to Llei 5/2014, Andorran personal income tax (IRPF) exempts the first EUR 24,000 of income, taxes EUR 24,000–40,000 at 5%, and income above EUR 40,000 at 10% — so even high earners face a single-digit-to-10% effective rate. Company profits are taxed at a flat 10% under Llei 95/2010, with special regimes that can reach an effective 2%. VAT (IGI), under Llei 11/2012, is just 4.5%, among the lowest rates in Europe.

For an HNWI, the practical effect is that income, gains and consumption are all taxed lightly, while the stock of accumulated wealth — and its transfer to the next generation — is not taxed at all. It is the interaction of these elements, rather than any single rate, that makes the jurisdiction attractive for substantial, long-held wealth.

What Does It Cost to Become an Andorran Resident?

Accessing this tax environment requires becoming a genuine Andorran tax resident, which involves real financial commitment. According to Llei 2/2026 (Llei Òmnibus 2), passive residency (residence without local employment) requires a EUR 1,000,000 investment in Andorran assets — with alternatives including Andorran real estate, shares in Andorran companies, authorised financial instruments or Andorran investment funds — plus a EUR 50,000 non-refundable state deposit and EUR 12,000 per dependent. A dedicated EUR 400,000 allocation to the alternative housing fund is one of the qualifying investment routes.

If you choose to buy property, the Impost sobre la Inversió Estrangera Immobiliària (IEI) applies at 6% on a first property and 10% on additional ones, with HNWI-grade property generally starting around EUR 800,000. The self-employed (compte propi) route is lighter — around EUR 50,000 of committed business capital — but requires running a real Andorran business. Healthcare contributions to the CASS system run at 22% in total for employment (15.5% employer, 6.5% employee). Genuine tax residency also requires actually living in Andorra and meeting substance requirements, not merely holding a permit.

Frequently Asked Questions

Is there really no wealth tax in Andorra?
Correct. As of 2026 Andorra has no annual tax on net worth. Your portfolio, property and other assets are not taxed simply for being held.

Will my heirs pay inheritance tax in Andorra?
No. Andorra imposes no inheritance tax on assets passing to heirs. However, if heirs live abroad or assets are located in another country, that country’s rules may still apply, so cross-border estates need planning.

Can I gift assets to my children tax-free in Andorra?
Andorra has no gift tax, so lifetime transfers are not subject to a specific Andorran charge. Cross-border situations may still trigger tax elsewhere.

Does Andorra charge an exit tax if I leave?
No. Andorra does not impose an exit tax on unrealised gains when you cease residency. The country you move to afterwards may have its own arrival rules.

How are capital gains taxed in Andorra?
Most gains are taxed within the income tax framework at up to 10%, and can reach 0% after a 10-year holding period, depending on the asset.

What is the minimum to qualify for passive residency?
Under Llei 2/2026, passive residency requires a EUR 1,000,000 qualifying investment plus a EUR 50,000 non-refundable state deposit, and EUR 12,000 per dependent.

Plan Your Move with Accurate Numbers

Andorra’s 0% wealth, inheritance, gift and exit taxes are powerful — but the value to you depends on your assets, your current country and how your move is structured.

This article is for general information and reflects the position as of June 2026. It is not tax or legal advice. Cross-border wealth, succession and relocation planning depends on your personal circumstances and the rules of every country involved — always seek individual professional advice before acting.

Sources

Leave a Reply

Your email address will not be published. Required fields are marked *