All about the Personal Income Tax
Personal income tax is the tax on income earned worldwide by individuals who are considered tax residents in Andorra. Although the general income tax rate in Andorra is 10% on income received in a year, if the income is less than 24,000 euros per year, the rate is 0%. For annual income between 24,000 euros and 40,000 euros, the rate is 5% and for annual income over 40,000 euros, the rate is 10%.
Income subject to personal income tax is divided into two groups:
- General Base: are those obtained from the performance of a job, from real estate capital and those derived from a professional or business activ.
- Saving base: income from movable capital and capital gains and losses.
Inheritance and donations are excluded from income tax. There are deductions and bonuses that can be deducted by the person who must make the income tax return as a family cost deductible, primary domicile costs and contributions to the pension plan among others.
For people who work on Andorran territory but are not tax residents in Andorra, as for example border workers, it is very likely that they will have to pay the Non-Resident Income Tax – IRNR. This is a general fixed rate of 10%.
When should an income tax return be filed in Andorra this year 2023?
The presentation and liquidation of the Personal Income Tax (IRPF) is made every year, between April 1 and September 30, and refers to the income received in the previous fiscal year.
Watch our video on the different tax types in Andorra here: