Banking and taxes

Managing your money in Andorra

Banking and taxes

Andorra's well known status as a tax haven attracts many people to its banks. Some government revenue, however, is raised through certain purchases, and tourist duties.


There are currently six Andorra banks, with branches in the villages and towns. Banking is similar to the Swiss system, and numbered accounts are normally available after a brief interview with bank staff. The lack of exchange control in Andorra allows for banking in any currency (with the euro being used as a base). Rates are quoted daily, and aligned to the Swiss exchange in Zurich.

To open an account is simple, even with the due diligence laws of international banking. A deposit of 100 euros is required, but after this there are no restrictions on transferring funds to and from Andorra in any currency. Money laundering regulations are observed by all Andorran banks, as bank officials are as liable as the institution in the event of any illegal actions.

Residents and non residents are able to borrow money from local banks for mortgage purposes. The most common conditions are that the bank will loan the international applicant up to 60% of the purchase price of a property for up to 25 years at a fixed rate. This rate is normally lower than that offered by British banks. Capital and interest repayments are made together.

Taxes and duties

Some purchases by tourists carry a small duty which helps contribute to the state’s revenue. The duties vary from 3% to 40%. On consumables, they range from 3% to 12%.

Building materials, books and furniture have a duty of 4%; cars, computers and leather goods 7%, and jewellery at 12%. Alcohol and cigarettes bear a special rate of between 12 and 40%. Gasoline and diesel also carry heavy levies.

Recent taxes introduced on the purchase of property have also increased government revenue. The tax varies from 3.75% to 4% depending on the local authority. The decision was made by the government in an attempt to slow the increasing rate of real estate speculation in Andorra.

The benefits of being a resident in Andorra are numerous. One of the most important is the fiscal advantage of being exempt from the current tax of 15% on interest earned on deposits in Andorran banks. This tax will be increased over the next couple of years to 35%.

The economy

Andorra is known as a tax haven due to its low tax rates, which are some of the lowest in the world. Not a lot of money is necessary to run a country with a population of 76,000 residents. Andorra is a neutral state and has no army to maintain, and so its defence budget is non existent. Secondly, some of the government’s revenue is raised by the small customs duty that is levied on all items imported into Andorra.

Tourists spend a lot of money on goods which carry duties. This raises the revenue to provide for the state. The duties vary from 3% to 40%. On consumables, they range from 3% to 12%, with building materials, books and furniture at 4%; cars, computers and leather goods at 7% and jewellery at 12%. Alcohol and cigarettes bear a special rate of between 12% and 40%. Petrol and diesel also carry heavy levies.

One can maintain a very comfortable standard of living for a considerable amount less than in the UK. Due to the active import and export business in Andorra, goods and delicacies from all over the world are available in most of the large supermarkets and department stores.

The information for this guide was provided by Tribune Properties. 

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