France vs Andorra 2026: Comparing Taxation

Comparing French and Andorran taxation isn’t just about setting a French marginal rate of 45% against an Andorran rate of 10%. The marginal rate isn’t the average rate, and a change of residency doesn’t automatically move all income to the Principality.

A useful comparison needs to factor in tax residency, the source of income, family situation, companies owned, real estate, and social security contributions.

2026 comparison table

Item	Andorra	France
Income tax	10% rate, with allowances and tax credits	Progressive scale from 0% to 45%
Investment income	Savings base taxed at 10%, subject to exemptions	Standard flat tax (PFU) of 31.4% in 2026, or opt into the scale
Corporate tax	General rate of 10%	Standard rate of 25%
Reduced corporate rate	Regimes and deductions under conditions	15% on an initial slice for certain SMEs
Consumption tax	General IGI of 4.5%	Standard VAT of 20%
Real estate wealth	No general national tax comparable to the IFI	IFI wealth tax above €1.3m of net taxable real estate
Tax treaty	France-Andorra treaty in force	France-Andorra treaty in force

Example 1: €100,000 of taxable income

Take a single person with no children, with net taxable income of €100,000, no specific deductions, and excluding social security contributions.

In France, applying the 2026 scale to 2025 income results in an indicative gross tax bill of around €24,801 before any rebate, reduction, or credit.

In Andorra, a simplified calculation based on the general personal allowance of €24,000, the 10% rate, and the maximum tax credit of €800 results in around €6,800.

This example illustrates a potential difference, but it isn’t enough on its own to draw a conclusion. The income needs to genuinely fall under Andorran personal income tax, and the person needs to have genuinely transferred their tax residency.

Example 2: €100,000 of company profit

For a business taxed at the standard rate, before credits and non-deductible expenses:

• Andorra: indicative tax of €10,000;
• France: indicative tax of €25,000.

That said, an eligible French SME can benefit from a 15% rate on an initial slice of profit. Conversely, an Andorran company managed from France, or with a French permanent establishment, can remain taxable in France on all or part of its activity.

Dividends: don’t just compare personal tax rates

In Andorra, dividends distributed to a resident individual by an Andorran company subject to corporate tax can be exempt from personal income tax.

In France, dividends generally fall under the flat tax (PFU), whose combined rate has been 31.4% since 2026, unless the taxpayer opts into the progressive scale or specific situations apply.

For a dividend paid by a French company to an Andorran resident, it’s necessary to analyse:

• the tax already paid by the company;
• French withholding tax;
• the tax treaty;
• beneficial ownership status;
• Andorran tax treatment;
• any applicable anti-abuse rules.

What remains taxable in France after leaving?

Transferring residency doesn’t remove tax ties to France. The following can, in particular, remain affected:

• rent from property located in France;
• French real estate capital gains;
• certain remuneration for activity carried out in France;
• certain dividends and pensions;
• the IFI wealth tax on French real estate assets;
• exit tax where its conditions are met.

Someone who keeps their home, family, main activity, and economic centre in France can also remain a French tax resident despite holding an Andorran residence card.

The tax residency criteria

Andorra generally considers someone a tax resident where they spend more than 183 days in its territory, or where the main centre of their economic activities or interests is located there.

France examines, among other things, the household, main place of residence, main professional activity, and centre of economic interests.

Where both countries claim residency, the tax treaty applies a series of tie-breaker criteria. It’s therefore necessary to organise and document:

• accommodation;
• days of presence;
• where the family lives;
• where any companies are managed from;
• bank accounts and everyday expenses;
• contracts and professional roles.

When can Andorra make sense?

Relocating can make sense where someone genuinely wants to live in the Principality, can manage their business from there, has an international client base, and is willing to shift their centre of life.

France may remain more suitable where the business, employees, clients, family, and professional assets remain firmly concentrated there long-term.

The right outcome isn’t the lowest rate on a table. It’s a legally defensible structure, compatible with your way of life, and sustainable over several years.

Frequently asked questions

Is spending 183 days in Andorra always enough? No. Economic interests, the household, and the tax treaty also need to be examined.

Does an Andorran company allow you to invoice French clients? Yes, but where the work is actually carried out, effective management, and the risk of a French permanent establishment all need checking.

Can an Andorran resident keep a flat in France? Yes. Income, capital gains, and potentially the IFI wealth tax remain subject to French rules.

Does the treaty remove all double taxation? It allocates taxing rights and provides relief mechanisms, but each type of income needs to be analysed separately.

To go further: Andorra vs France comparison, Taxation in Andorra, Active residency, Passive residency, Tax simulator.