Andorra Capital Gains Tax

The capital gains tax in Andorra favors foreign investors on the sale or transfer of assets such as stocks and properties. Andorra’s capital gains tax rates are considerably lower than other European countries, averaging around 10%. Learn everything about capital gains taxes in Andorra from the below guide.


Capital Gains Tax Rate in Andorra

For companies and individuals in Andorra, capital gains are calculated like any other income from a tax perspective. The nominal capital gains tax rate is 10% and applies to financial capital gains.

Capital Gains Tax in Andorra: Real Estate

In Andorra, real estate capital gains are taxed from 15% to 1%, based on the ownership period prior to the transfer of the property. Introduced in Andorra in 2006, capital gains tax is levied on the sale of real estate investment acquired less than 10 years ago, payable at the sale of the property.

The Government withholds 5% of the amount of the capital gain for a period of 3 to 6 months in order to verify that there are no administrative sanctions in progress and to control the value of the declared property. 4% real estate transfer tax is applied when buying a property in Andorra, divided between the government and the parish as ITP (Impuesto Indirecto de Transmisiones Patrimoniales). 1% of the price of the sale for the notary’s office.

How is the Capital Gains Tax calculated?

The calculation is made according to the number of years during which the property has been owned by the seller:

Capital gains tax decreases from 15% to 1% and is applied to the profits generated by the sale of real estate, depending on the time that the owner kept the property before selling it:

In this way, the Government of Andorra is trying to avoid real estate speculation in the country.

If you are selling property, which is your main residence, you can avoid capital gains tax if you purchase another property within six months.

Andorra Capital Gains Tax on Shares

In Andorra, you do not have to pay capital gains tax on shares if you own less than 25% of the company, which makes it easy for people who want to day trade stocks with low risk and higher potential returns (as well as individuals looking at long-term investments). Also, if a shareholder has been holding company shares for more than 10 years, capital gains tax no longer applies.