Ad Non Resident Income Tax

Andorra non-resident income tax and cross-border methods, 2026

Source-cited working-paper draft. No accountant has signed off this Guide.

1. Who this applies to

IRNR applies to non-resident individuals and entities receiving income treated as arising in Andorra. Determine domestic residence first: individuals use IRPF article 8; companies use IS article 7. A foreign address, citizenship, permit or incorporation alone does not settle all residence tests. Then apply the actual operative treaty, including its residence and anti-abuse conditions. Current individual and corporate methods are in ad-income-tax and ad-corporate-income-tax. IRNR Law 94/2010, arts 1, 3–4.

Income from activities in Andorra, assets there or rights exercisable/usable there is within domestic source rules. Payments by resident companies or resident businesspeople are included unless the relevant rights/services were contracted, performed and used outside Andorra. Remote delivery abroad alone fails that three-part exception. International merchandise purchases, associated mediation commissions and accessory costs have a separate exclusion; qualifying payments borne by a foreign PE for its activity are also excluded. Arts 9, 14(6)–(7).

A continuous/habitual fixed business location can constitute a PE. Domestic examples include branches, offices, workshops, stores, extraction/agricultural sites and construction/installation/assembly exceeding twelve months. A dependent agent habitually exercising contracting powers can create a PE. Test the actual storage, purchasing and preparatory/auxiliary exclusions and the ordinary-course independent-agent exception. Common ownership alone does not create a PE. Several Andorran centres form one domestic PE. Property rental is expressly taxed separately under the non-PE chapter. A treaty's PE rule must also be applied where relevant. Arts 10–11, 18.

Without a PE, compute each taxable accrual separately; do not net one stream's loss against another's income. With a PE, compute total attributable profit wherever earned. A payer, property-rental manager or representative can have statutory liability separate from the recipient's obligation; mere payment intermediation has the stated exception. A PE requires a resident representative; the ministry can require one for other substantial/particular income. Notify appointment with express acceptance within one month, or appoint/notify within one month of the ministry request. Arts 5–7, 10, 16.

2. Rates, bands and thresholds

The non-PE property rates are whole-gain rates, not progressive bands or the resident individual's holding coefficients. Law 5/2025 article 80 amended the schedule; its fifth transition concerns the separate IRPF amendment, not an IRNR exemption. This table covers 2026 disposals, not a claim about every historical transfer date. Law 5/2025, art 80 and transition 5.

3. The base

Classify each non-PE receipt

Employment source follows personal work in Andorra; pensions can be sourced through earlier Andorran employment or the resident/PE payer. Director remuneration from an Andorran entity is a separate specified source category. Royalties include the defined industrial/copyright/software rights, know-how, equipment use and image rights. Decide the actual right conveyed, not just “subscription”, “consulting” or “royalty” on the invoice. A treaty can classify the item differently from domestic law. Arts 12–14.

Article 13 includes qualifying dividends, interest/debt-asset returns, capitalisation/life-invalidity contracts and regulated collective-investment returns. Article 15(b) exempts that income; a share-sale gain is not automatically a dividend. The separate share-gain exemption tests that the taxpayer did not hold more than 25% in the prior twelve months. Regulated-fund gains, specified gratuitous financial acquisitions, mandatory employment-termination compensation, qualifying personal-damage compensation, scholarships/prizes and specified other categories have their own exemptions. Match the actual statutory category and supporting facts before withholding zero. Do not assume all foreign investment income or all severance is exempt. Arts 13–15.

The ordinary non-PE base is full accrued income, without a general expense or employee-CASS deduction. Property rent has the 20% reduction, not itemised additional expenses: EUR 15,000 rent produces EUR 12,000 base and EUR 1,200 tax absent a treaty override. The preserved original control is in research. Gains use the specific acquisition/disposal rules: acquisition amount plus qualifying investments/costs excluding interest; actual disposal value subject to the market-value minimum and the permitted direct disposal-cost rule. Gratuitous acquisitions/disposals use their specified market values. Do not import ordinary movable-asset selling-cost treatment into the separate property rule. Arts 25–28 bis.

Noncash contributions use the highest applicable nominal-plus-premium, quoted-share or contributed-asset market value in article 28. A nonresident member's separation/liquidation gain is the liquidation entitlement or assets' market value less participation basis, separately from the company's own liability. Exchanges and subscription rights have their own valuation rules. Check an applicable exemption/treaty afterwards; do not label the entire liquidation distribution exempt interest or dividends. Art 28.

For a gross contract, withholding = taxable gross base × actual domestic/treaty rate and net payment = gross less withholding. For a true net-of-tax undertaking, reconcile gross = promised net / (1 − applicable rate) only where that rate applies to the whole gross amount; do not deduct tax from the promised net and call the contract satisfied. Noncash income requires an income-on-account workpaper. Related-party values need ad-transfer-pricing; pricing alone does not establish source, exemption or deductibility. Arts 16, 25, 34–35.

Property without a PE

Use the positive difference between statutory real transfer value and supported acquisition value. Add lawful documented improvements and non-deductible taxes/costs directly and inseparably associated with acquisition or development. Where an acquisition value was officially checked, use that assessed value. Gratuitous acquisitions use the statutory real value; no-price transfers must state their value in the deed/settlement document. Do not automatically deduct every selling cost. Property-equivalent acts include interests with at least 50% directly/indirectly Andorran property assets or property-enjoyment rights, court/administrative awards, debt settlements and specified real rights. Test these alongside actual article 15 and treaty provisions; do not apply an ordinary share exemption merely because the document transfers shares. Art 28 bis.

Compute actual tax at the holding-period rate, subtract the buyer's 5% of total transfer value and settle/refund the difference. The withholding is not the final gain rate. Exempt transfers have the statutory exception; obtain evidence before treating the buyer as released. Non-PE seller settlement is due within thirty days of a private contract or simultaneously with the public deed; later notarisation needs proof of prior settlement. Excess property withholding is refundable within the special six-month period from application under the regulation. This IRNR method does not establish IGI, ITP, foreign-investment tax or investment-authorisation treatment. Arts 33 bis–ter, 35(5); regulation arts 22(4), 25, 34.

Ordinary PE: accounting bridge to settlement

1. Attribute activity income and gains/income of the PE's assets. Keep separate accounts; combine domestic activity centres under article 18. Reconcile functions, assets, costs, head-office accounts and transaction values. Arts 16–18, 23.
2. Apply the IS tax-base rules, including depreciation, impairment/provision restrictions, permanent/timing differences, finance restrictions, exemptions and eligible loss vintages. Then apply the IRNR-specific overrides: internal royalties, interest, commissions, technical-assistance and asset/right-use payments to the head office, its PEs or related entities are not deductible under article 19(a), despite an arm's-length price. The express foreign-bank PE interest exception is separate. A reasonable actual management/general-administration allocation corresponding to factors used by the PE can be deductible under article 19(b), with related-party evidence. Classify actual pooled administration separately from disallowed internal service/royalty charges. Art 19; IS Law 95/2010, arts 9–23.
3. Offset eligible unexpired IS losses within the incorporated rules and apply 10%. Article 20 imports IS articles 43, 43 bis, 44 and 44 bis, including the same limits. Respect the combined 30%-of-pre-loss-gross-tax floor when applying losses and credits; there is no blanket permission to eliminate all PE tax with losses. Use the full schedules in ad-corporate-income-tax, retaining the original loss/credit clocks and foreign-tax proof. IRNR arts 19–20; IS arts 22, 43–44 bis.
4. Deduct the ordinary and property advances actually paid; excess is refundable. Ordinary advance is 50% previous settlement, with short-period reference completion and first-activity-year exclusion. PE property advances follow IS articles 45/45 bis and the speculative-gain surcharge rules, not the non-PE seller's 5%-of-proceeds withholding calculation. IRNR arts 20, 24; regulation arts 19–21.

PE transfer/cessation and resident departure

For temporarily imported fixed assets re-exported, article 17(2)(a) does not recognise an asset alteration, without prejudice to tax for the use-period payments. For assets acquired/assigned for the PE's activity, transfer or cessation compares market value on exit against market value at original Andorran assignment/start of use, less relevant depreciation and value corrections. Trading stock uses its market-value income rule, with related head-office transactions tested separately. On PE cessation article 17(3) applies the asset rule; do not simply return an asset to head office at historical cost without calculating the Andorran-period gain. IRNR art 17(2)–(3).

A resident company's migration is a different event. IS article 17(a)–(b) charges the specified market-versus-tax/book-value difference, except assets remaining in an Andorran PE with retained basis. Incoming fixed assets have the article 17(c) market-entry/proof/remaining-life rules. A transfer to a foreign PE has article 17(d)'s specifically limited deferral, prior guarantees and annual note; it is not an automatic whole-company migration deferral. CV0366-2026 confirms for the described Andorra-to-Spain corporate move that article 20's participation exemption does not shelter the deemed departure gain on a Spanish subsidiary. Close the resident company's period at the actual registry migration event under article 39. IS arts 17, 39; CV0366-2026, entire response.

An individual's loss of IRPF residence accelerates income pending attribution into the last IRPF period under article 42(3). That provision is not a general charge on every unrealised personal asset gain. Establish actual residence and treaty tie-break facts, pending instalment income and post-departure Andorran-source income; classify later receipts under the correct period/tax rather than applying a company exit rule to an individual. IRPF arts 8, 40–42.

4. Deadlines and filing

Income normally accrues when due or earlier collected; gains when the asset alteration occurs. Non-PE ordinary declarations/payments are during the following-quarter month: April, July, October, January, with the invoice/equivalent and income schedule. The recipient's separate filing exemption requires the withholding party's compliant declaration/payment, not merely a deducted invoice amount. The payer can use the limited next-quarter treatment for income accrued in the quarter's final month under regulation 24(1); it is not a universal extension. CASS-covered wages/benefits instead remit monthly between the 1st and 15th of the following month. Law arts 32–35; regulation arts 22–24.

A statutory/treaty zero-withholding result can still require a negative declaration. The law expressly exempts reporting for article 15(a), (b), (d), (f), (h); do not extend that list to every exempt category merely because regulation 26 also lists (e). The law controls where lists differ. Keep actual withholding/payment records; communicate the preceding quarter's withholding in the first thirty calendar days of April, July, October and January and supply the required certificate. Use the current approved form, not a guessed electronic box/number. Law arts 33, 35; regulation arts 24–29.

Register a PE before activity in the nonresident/business tax register and commercial register, obtain NRT and provide incorporation/authority/representative documents. A normal PE period follows its declared accounting year, at most twelve months, default calendar year. File/pay in the month after six months from period end: July 2027 for normal calendar 2026. Early filing does not accelerate payment/refund deadlines. Law arts 21–24; regulation arts 17–19.

Cessation, withdrawal of investment, PE transfer, head-office dissolution/liquidation or proprietor death can close the period. Regulation 18(2)'s special final declaration uses the non-PE timetable from the event, and deregistration cannot be authorised until filed; do not automatically retain the ordinary July deadline after closure. The regulation also addresses an inbound head-office residence move; retain the actual legal restructuring event, rather than replacing the law's dissolution/liquidation closing trigger. Reconcile the final accounts, assets, advances and refund/debt before cancellation. Law arts 17, 21; regulation art 18.

Ordinary excess withholding, including above-treaty withholding, is reclaimed using the approved self-assessment/amendment request and tax/payment evidence. Law article 36 provides a provisional decision within three months of application, payment within the subsequent one-month rule and legal-interest consequences for delayed payment; 2026 legal interest is 3.24%. Property excess has its distinct six-month rule. Do not confuse these with tax late interest of 4.05%. Law art 36; regulation arts 25, 33–34; Budget Law 1/2026 art 17.

5. Penalties and interest

IRNR simple minor offences have EUR 150–3,000 fines; failure to appoint the required representative has the specified EUR 3,000 fine. Defraudation sanctions are 50%–150% of evaded tax, with actual offence/graduation tests. The property-valuation offence has its particular more-than-50% built-property or more-than-100% undeveloped-land discrepancy tests; do not apply these as automatic market-value tolerances. The sanction proposal allows thirteen working days for representations; suspension on appeal has the statutory guarantee requirements. Arts 37–40.

General tax late-filing surcharges are 2% below two months, 5% through twelve months and 10% beyond twelve, or 15% following the specified request. Apply the separate six-month interest and sanction coordination. Enforcement surcharges are mutually exclusive 2%, 10% or 20% by payment stage; 20% adds interest, whereas 2%/10% exclude it. 2026 tax late interest is 4.05% annually on the statutory base/period, with authority-delay exclusions. Payer/representative liability and actual remittance remain separate from tax deducted from a recipient. General Tax Law 21/2014 arts 23–25, 125–132; Budget Law 1/2026 art 17.

6. Cross-border points

Apply the actual treaty

Use the Government treaty directory and both authorities' current texts to establish entry into force, application to the payment/year, protocol and applicable MLI provisions. Obtain tax-residence evidence for the actual recipient/period, beneficial ownership where required, legal income character, establishment/PE facts and anti-abuse evidence. Apply domestic exemption first, then treaty limitation/exemption where it improves the result; a treaty ceiling does not create tax absent under domestic law. Retain the exact article and documentation with each zero/reduced withholding conclusion. If proof is incomplete, compute domestic exposure and the supported refund route rather than silently certifying treaty relief. IRNR arts 3, 35–36; Government directory.

For Spain and France, the authorities' synthesised texts incorporating the MLI were checked for 2026. The authentic treaty/MLI texts control over the synthesis. In both treaties, individual dual residence follows permanent home, centre of vital interests, habitual abode, nationality and competent-authority sequence; company dual residence follows effective management in the cited article 4. Article 7 generally reserves business profits to the residence state absent the other state's treaty PE, subject to separately classified income articles and anti-abuse rules. Thus an ordinary qualifying Spanish/French business service can differ from domestic gross-service withholding when no Andorran PE exists; a royalty, director payment or property receipt is not automatically article 7 business profit. Spain–Andorra treaty arts 4–7, current synthesis; France–Andorra arts 4–7, current synthesis.

Both treaties' ordinary employment exception requires all three: no more than 183 days in the specified rolling twelve-month period, non-host-state employer/payment, and no host-state PE bearing the remuneration. This is not the domestic calendar residence test and does not exempt a frontier worker employed by an Andorran employer merely because fewer than 183 days are worked. France also has the separately conditioned teacher/researcher provision; directors use the distinct article 15. Spain royalties generally have a 5% beneficial-owner gross cap under article 12; France has that cap but its qualifying copyright category, excluding software/films/recordings, can be residence-only under article 12(1)(c). Do not replace the actual licence analysis with one “France royalty rate”. These are selected treaty methods, not a complete treaty-rate matrix. Spain synthesis arts 12, 14–15; France synthesis arts 12, 14–15.

Resident foreign-tax relief and other taxes

For resident IRPF foreign income included in the Andorran base, gross up foreign tax as required, determine the Andorran-law net foreign income and cap the credit at the lesser of actual comparable foreign income tax, any treaty limit and attributable Andorran tax. Group by country, with each PE separate. Only credit unused for insufficient liability carries three subsequent periods; tax above the substantive cap does not automatically carry. Corporate/PE relief follows IS article 43 bis and the combined floor, with the corporate six-year unused-credit rule. Exempt participation/foreign-PE income follows its own tests rather than producing an additional credit on the same exempt income. IRPF art 48; IS arts 20–21, 43–43 bis.

IGI import/reverse-charge and CASS coverage are separate calculations, covered by the companion Guides. A tax treaty is not a social-coverage certificate. For a foreign adjustment, possible corresponding relief or mutual-agreement procedure, retain both assessments, notice dates, treaties and competent-authority requirements; domestic IRNR refund is not a substitute for a foreign-state remedy. Detailed dispute/arbitration administration and the full treaty/social-agreement matrix are outside this ordinary method.

7. Two worked examples that recompute

Separate taxable services and royalties

No PE or treaty relief; EUR 12,000 gross taxable services and EUR 8,000 gross statutory royalties. Tax is EUR 1,200 plus EUR 400, and net payments total EUR 18,400. Classification/source are verified inputs, not conclusions derived from the arithmetic.

oaCopy code
name: Andorra separate service and royalty withholding
inputs:
  service: 12000
  royalty: 8000
  service_rate: 0.10
  royalty_rate: 0.05
steps:
  service_tax: service * service_rate
  royalty_tax: royalty * royalty_rate
  tax_total: service_tax + royalty_tax
  net_total: service + royalty - tax_total
expected:
  service_tax: 1200
  royalty_tax: 400
  tax_total: 1600
  net_total: 18400

Property gain and withholding use different bases

Non-exempt sale on 1 October 2026 of property acquired 1 October 2020; acquisition EUR 300,000, lawful documented improvements EUR 20,000 and qualifying acquisition costs EUR 10,000. Actual statutory transfer value and consideration both EUR 500,000; no treaty override. The six-year holding has a 15% gain rate. Gain EUR 170,000 gives EUR 25,500 tax, less EUR 25,000 buyer withholding, leaving EUR 500 payable. Other property taxes are not computed.

oaCopy code
name: Andorra property gain and withholding settlement
inputs:
  transfer_value: 500000
  acquisition: 300000
  improvements: 20000
  acquisition_costs: 10000
  gain_rate: 0.15
  withholding_rate: 0.05
steps:
  adjusted_acquisition: acquisition + improvements + acquisition_costs
  taxable_gain: transfer_value - adjusted_acquisition
  assessed_tax: taxable_gain * gain_rate
  buyer_withholding: transfer_value * withholding_rate
  settlement: assessed_tax - buyer_withholding
expected:
  adjusted_acquisition: 330000
  taxable_gain: 170000
  assessed_tax: 25500
  buyer_withholding: 25000
  settlement: 500

8. Ask the client first

• Who is the actual recipient, what establishes domestic/treaty residence and beneficial ownership, and which year/payment is involved?
• What was supplied/licensed, where was it contracted, performed and used, and is consideration gross, net or noncash?
• What premises, staff, agents, contracting powers, asset assignments and project durations establish the PE position?
• Which accounts, internal charges, loss/credit vintages, foreign taxes, advances and remittance receipts support the calculation?
• Which property/share/cessation/migration event occurred, with what dates, bases, market valuations and registry/deed evidence?
• Which treaty/election/representative documents and actual assessment/notices change withholding, filing or refund?

Sources

Not yet confirmed: no complete current treaty-rate/social-agreement matrix, universal residence-certificate validity period or live form/schema is certified; apply the actual period's instrument and document. Full MAP/arbitration, reorganisation, foreign-investment/ITP and special-regime procedures are separate specialist work. A case-specific property-rich share exemption needs the exact interaction of article 15 with the equivalent-property facts and treaty; do not automatically grant or deny it solely from a share label. Consolidations lack official legal status and authentic treaty/MLI texts prevail over authority syntheses. Ordinary source, non-PE base, PE profit/cessation, withholding, filing and refund methods are supplied above; historical transitions require the actual event date and underlying enactment.

Contributed by Michael Cutajar.

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Today's figures and who stands behind this skill

This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-10-28. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call get_skill with slug ad-non-resident-income-tax on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/ad-non-resident-income-tax. If neither is available, confirm every figure against the official source pages cited above before relying on it.