Capital gains on foreign properties are taxable at a rate of 10%

Capital gains on andorran real estate are not taxed according to the IRPF. They continue to be taxed according to the law regulating such tax.

Capital gains on foreign properties owned for more than 10 years are exempt ( Art. 5.m  IRPF )

Otherwise there is a tax of 10% on foreign properties owned for less than 10 years.

Capital gains and losses  on foreign properties owned for more than 10 years are excluded from Andorran tax calculations ( Art. 5.m IRPF ), hence foreign taxes may not be deductible.

INCOME taxes paid abroad can be credited. SALES TAXES ONLY COUNT AS EXPENSES

The law :

Article 48. Deduction to Eliminate Foreign Double Taxation

1. When the Basis of Taxation of the taxpayer includes income or capital gains or losses obtained and taxed in foreign parts, then the Gross Tax is reduced by the lesser of the two amounts following:

a) The effective amount settled up in foreign parts by reason of a tax law, with characteristics similar to this tax law or to the tax law on income of fiscal non-residents (Law 94/2010 of 29th of December) which has subjected the taxpayer to taxation in respect of such income or gains.

b) The amount of the Gross Tax which would correspond to that which would be paid to the Principality of Andorra in respect of the said income if it had been obtained in Andorran territory. For the purpose of calculating this amount, the Basis of Taxation corresponding to the foreign income is determined according to the standards of this tax, and only the expenses specifically connected to the creation of this income are attributed to the said Basis of Taxation.

Unofficial translation by Charles Schaller-Kelly ©. Charles disclaims liability for errors.

Art.48 IRPF ( catalan )

Deducció per eliminar la doble imposició internacional

1. Quan en la base de tributació de l’obligat tributari s’integrin rendes o
guanys de capital obtinguts i gravats a l’estranger, es dedueix de la quota de
tributació la menor de les dues quantitats següents:

a) L’import efectiu satisfet a l’estranger per raó d’un impost de característiques
similars a aquest impost o a l’impost sobre la renda dels no residents
fiscals que hagi sotmès a imposició l’obligat tributari sobre aquestes rendes o guanys.

b) L’import de la quota de tributació que correspondria pagar al Principat
d’Andorra per les rendes esmentades si s’haguessin obtingut en territori andorrà.

A l’efecte del càlcul d’aquest import, la base de tributació corresponent a la
renda estrangera es determina d’acord amb la normativa d’aquest impost, i
són únicament imputables a aquesta base de tributació les despeses específicament connectades amb la generació de la renda esmentada.

” The amount of the Gross Tax which would correspond to that which would be paid to the Principality of Andorra in respect of the said income if it had been obtained in Andorran territory .  For the purpose of the calculating this amount, the basis of the taxation corresponding to the foreign income is determined according to the standards of this tax