Personal income tax declaration in Andorra

Important information for taxpayers: the Andorran income tax return (personal income tax – IRPF) can be filed between 1 April 2023 and 30 September 2023, and corresponds to the tax year 2022.

All income, capital gains and losses received must be included in the IRPF declaration in Andorra, regardless of the country of origin, as Andorra is taxed on “worldwide income”. Subsequently, the corresponding deductions will be applied, eliminating double international taxation in accordance with existing agreements.

1. Individuals who have their tax residence in Andorra. This mean:

• Living in Andorra for more than 183 days a year.
• Have their main focus or the basis of their economic activities or their economic interests directly or indirectly in Andorran territory.

2.Income from civil partnerships, community property, inheritances and autonomous estates regulated by the tax system.

The general rate is 10%, however, it should be noted that the withholding tax is divided into brackets:

• The bracket up to 24,000 euros is exempt from tax.
• Between 24,001 and 40,000 euros per year, a reduced rate of 5% is applied. The reduction applied is a maximum of 800 euros.
• For net income over 40,001 euros, the rate to be applied is 10%.

Of the savings tax base, the first 3,000 euros are exempt and the rest is taxed at a rate of 10%.

In the case of the employees, contributions to the CASS can be deducted (only the employee’s part) and 3% of general expenses on certain full income with a maximum of 400 euros.

As for reductions in the general base, if the spouse does not earn any income, the minimum exemption of 24,000 euros can be increased to 40,000 euros. Family responsibilities can also be deducted with 750 euros for each descendant under 25 years of age or ascendant over 65 years of age, as long as they live together and do not have an annual income of more than 12,000 euros. Other applicable reductions relate to direct family members with disabilities, mortgages on the main home, pension plans, etc.

In addition, the tax liability can be reduced with deductions to avoid double internal and international taxation, job creation and for making new investments.

It is important to have the following documents ready in order to be able to file your personal income tax return in Andorra without any problems:

• All pay slips received.
• Withholding certificate issued by your employer.
• Bank certificates.
• Pension certificate.
• The settlement proposal provided by the tax department.
• Book of accounting results of economic activities.
• Documents supporting the reductions to the tax liability you are going to apply for.
• Documents related to the obtaining of income.

There are two ways to file your income tax declaration in Andorra, in person or online. If you have your username and password for the Online Identification Module (MIL) or the Administration’s electronic certificate for the DTF Virtual Office, you can do the procedure online. To do the procedure in person, you must first request an appointment from the Government of Andorra website: https://www.e-tramits.ad/tramits/impostos/irpf. The office address is Baixada del Molí, 26, Andorra la Vella, Departament de Tribtuts i de Fronteres. Opening hours are Monday to Thursday from 8:00 to 15:00 and Fridays from 8:00 to 14:30.