Andorra tax residency: active and passive permits compared

Andorra is usually described as a single destination with a single set of requirements. It is better understood as two distinct residences that happen to share a border, because the obligation that matters most — how much of the year you must actually be there — differs by a factor of two between them.

There is a second thing worth stating early. Andorra has an income tax. It has had one since 2015, and a good deal of material still in circulation predates that and describes a jurisdiction that no longer exists.

The tax position

Personal income tax was introduced by Law 5/2014 and applies to residents on worldwide income. The general rate is a single low figure, applied above an exempt band with partial relief on the tranche immediately above it, so the effective rate on ordinary income is lower still.

The headline rate is 10 per cent. The first EUR 24,000 of income is exempt, and a further band up to EUR 40,000 attracts relief, giving an effective rate below the headline for most residents.

There is no wealth tax, no inheritance tax and no gift tax. Capital gains on Andorran real estate are taxed under a separate regime that tapers with the holding period. Corporate income tax and a general indirect tax exist at similarly low rates.

The point is not that the burden is heavy — it is not — but that Andorra belongs in a different category from the genuinely zero-tax jurisdictions. It is a functioning tax system with filing obligations, a growing treaty network, and a tax administration that issues residence certificates another country can test.

Active residency

Active residency is for people who work in Andorra: as an employee of an Andorran company, or through a company they own and administer, or in a liberal profession.

The requirements centre on the activity. A self-employed applicant must ordinarily hold a controlling interest in an Andorran company and occupy a position on its governing body, and the activity must be real rather than nominal. A deposit is lodged with the Andorran Financial Authority at the time of application. Accommodation in Andorra must be secured, and the applicant must be affiliated to the Andorran social security system.

The permit is issued initially for a short term and renewed on a longer cycle thereafter, with each renewal requiring evidence that the activity and the residence both continue.

Passive residency

Passive residency — residència sense activitat lucrativa — is granted on the basis of investment in Andorra rather than work there. It exists in several categories, the principal one being residence without gainful activity, alongside narrower routes for professionals with international projection and for people of recognised scientific, cultural or sporting standing.

The investment requirement was rewritten with effect from early 2026 and the change is substantial.

Llei 2/2026, which rewrote article 96 of Llei 9/2012, raised the general investment requirement to EUR 1,000,000 in Andorran assets, to be made within the first six months of the authorisation. Figures below that — EUR 600,000 as the former general threshold, and a reduced Housing Fund route sometimes reported at around EUR 400,000 — do not reflect the current text as read at the publisher’s consolidated portal, and secondary sources repeating them are out of date. Where the investment is in residential property, a minimum unit value of EUR 800,000 applies. The previously refundable deposit with the Andorran Financial Authority was replaced by a non-refundable payment to the state of EUR 50,000 for the main applicant and EUR 12,000 for each dependant, which does not count towards the investment threshold. Transitional provisions preserve the previous requirements for applications filed before the reform.

Applicants must also hold private health and disability cover, provide accommodation in Andorra, and demonstrate income sufficient to live without working there. Passive residents may not carry on gainful activity in Andorra; that is the boundary between the two permits.

Given how recently this changed, and that some figures sit in implementing regulation rather than in the statute, verify the current requirement directly with the Servei d’Immigració before committing capital.

The presence obligation, which is where the two diverge

Both permits carry an express minimum presence, and the difference between them is the single most consequential fact in choosing.

Active residency requires effective presence in Andorra of at least 183 days a year. Passive residency requires at least 90 days a year.

These are permit conditions, verified at renewal, and Andorra is a small country in which verification is not abstract. The immigration and police services check that residence is real, and the checks extend to the ordinary indicators of occupation.

Now the distinction that decides the tax outcome. Andorran tax residence is not established by holding a permit. It is established under Law 5/2014 by presence in Andorra for more than 183 days in the calendar year, or by Andorra being the main centre of your economic interests or activities.

A passive resident who satisfies only the permit obligation therefore holds a valid Andorran residence and is, on presence alone, not an Andorran tax resident. That gap is legitimate and sometimes deliberate. But it means the passive resident who wants an Andorran tax residence certificate — because Spain, or France, or the United Kingdom is asking — must plan to the higher line, not the permit line.

Active residents do not face this problem, because their permit obligation and the tax residence threshold sit at the same place.

Absences are counted against you, not for you

Andorra’s day test carries a feature that makes it materially harsher than the bare number suggests, and it is easy to miss. Article 8(1)(a) of Llei 5/2014 provides that in determining the period of presence, sporadic absences are computed as Andorran days unless the taxpayer demonstrates tax residence in another country.

Read that the right way round. Days you spend outside Andorra are added to your Andorran count by default. The burden sits with you, and it is discharged not by showing where you were but by producing a certificate of tax residence from somewhere else. Spain applies the same doctrine, and between two neighbours that both impute absences, a person tidily resident in neither on recorded presence can find both counting the same days.

The practical consequence for anyone relying on a day count: your recorded presence is a lower bound on the legal count, not the count itself. Staying under the threshold on recorded days proves nothing on its own. What discharges the imputation is the foreign residence certificate, which is why a page about Andorran days is really a page about which other country will certify you.

The country you left

Andorra’s neighbours are the practical issue. Spain and France both apply presence tests alongside centre-of-interests tests, and both scrutinise moves to Andorra closely for the obvious reason.

Spain’s test asks whether you spent more than half the year there, treats sporadic absences as counting towards presence unless you can prove tax residence elsewhere, and adds a presumption based on where your spouse and dependent children live. That “prove tax residence elsewhere” limb is exactly where an Andorran certificate is needed — and exactly where a permit will not do.

Andorra has concluded double tax treaties with Spain, France, Portugal and a growing list of others, so a tie-breaker is often available. It runs through permanent home and centre of vital interests before it reaches habitual abode, which means the days open the argument rather than close it.

Planning notes

• Choose the permit by the presence you will genuinely maintain, not by the investment you can raise. The two permits ask very different things of your calendar.
• If you take passive residency and need an Andorran tax residence certificate, plan to the tax threshold from the first year. The permit minimum is not enough.
• Verify the investment figures directly. They changed in January 2026 and some of them sit in regulation rather than statute.
• If you are leaving Spain, expect the enquiry to focus on where your family lives and where your economic interests sit, with the day count as the opening question rather than the answer.

What Residay tracks

Residay counts Andorran days against both reference lines — the permit obligation and the tax residence threshold — and holds the dated evidence behind each attributed day on your device, so that a renewal file or a certificate application rests on a contemporaneous record.

Andorra is covered as an advisory presence counter rather than a researched rule set, because the permit conditions include limbs no day count can decide: the reality of the activity, the maintenance of the investment, the centre of economic interests. What the app does is keep the two different counts separate and visible at the same time, alongside the count in the country you left, which will be examining the same year on its own rules. Crossing into France or Spain is unavoidable in Andorra, and those days count towards the Schengen allowance of 90 days in any 180-day window for anyone subject to it, as well as towards those countries’ own residence tests.