How to become a tax resident in Andorra? Tax residence rules

In order to reside in Andorra, you must have an administrative residence that authorises you to reside in the country.

In this sense, the administrative residences available for residing in Andorra are the following:

  • Active residences: either as a worker or as a freelance.
  • Passive residences: for investors, sportsmen and women or scientists.
  • Residences for digital nomads and entrepreneurs.

However, the fact of being the holder of an administrative residence does not imply that tax residency is achieved, which is a great confusion for new residents in Andorra or even for Andorran advisors.

What does it mean tax residence?

Tax residence determines whether a person is obliged to pay Personal Income Tax when he/she becomes a taxpayer.

In general, tax residence is determined by the length of stay in a country and by economic, family and social ties in that country.

Thus, tax residence is independent of obtaining administrative residence, and is determined by facts – background over form.

How does tax residence in Andorra work?

According to the Andorran Personal Income Tax Law, an individual is considered to be a tax resident in Andorra if he or she meets one of the following criteria:

  • Staying more than 183 days during a calendar year. Temporary absences from Andorra are counted as days spent in Andorra.
  • The centre of the individual’s activities or economic interests must be located directly or indirectly in Andorra (the majority of the individual’s income or assets are earned or located in Andorra, respectively).

In addition, there is a legal presumption of residence in Andorra for tax purposes if the individual’s spouse or dependent children are resident in Andorra.

Thus, having an administrative residence or green card issued by the Andorran government does not automatically make you a tax resident in Andorra, but you have to spend a large part of the year in Andorran territory.

Can I live 90 days in Andorra and be a tax resident in Andorra?

No. Many managers sell passive residency by saying that with 90 days stay in Andorra you will be a tax resident in Andorran territory.

The main reason for this is that the managers are either ignorant of the rules of international taxation or they want to convince you to sell them a residence, ignoring all the risks that could come from foreign tax authorities.

If you reside only 90 days in Andorra and for example the rest of the year in Spain, you will be a tax resident in Spain with the full force of the law.

How can I change my tax residence to Andorra?

In general terms, tax residence is what will allow you to pay taxes in Andorra and this is much more complex than simply getting an administrative residence or green card.

A prior analysis of your personal situation carried out by tax experts from your country of residence or Andorra is key to avoid future problems.

If you are interested in changing your tax residence to Andorra, we recommend reading the report “The definitive guide to living in Andorra”. For any questions you can contact us without obligation.

You can contact us without obligation in the following ways:

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"The definitive guide to living in Andorra"

  • Explanation of the tax framework
  • How to get the residency
  • Tips for living in Andorra

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