IGI in Andorra: what it is, tax rates and how it works
What is IGI in Andorra?
IGI (General Indirect Tax) is the main consumption tax in Andorra. It is equivalent to the VAT applied in other European countries, although with significantly lower tax rates.
In this guide, you will find everything you need to know about one of the pillars of the Andorran tax system.
IGI is an indirect tax levied on the consumption of goods and services within the Principality of Andorra.
It applies to most commercial transactions carried out in the country and forms part of the final price paid by the consumer. Businesses and self-employed professionals act as tax collectors and subsequently remit the tax to the tax authorities.
When referring to IGI in Andorra, it means the tax applied to the purchase of goods and the provision of services within Andorran territory.
What is the IGI rate in Andorra?
One of the main attractions of the Andorran tax system is that the standard IGI rate is 4.5%, making it one of the lowest consumption taxes in Europe.
This rate applies to most goods and services, although other specific tax rates exist depending on the nature of the transaction.
Comparison of indirect taxes in Spain, France and Andorra
| Tax rate | Andorra (IGI) | Spain (VAT) | France (VAT) |
| Standard | 4.5% | 21% | 20% |
| Increased | 9.5% | - | - |
| Special | 2.5% | - | 10% |
| Reduced | 1% | 10% | 5.5% |
| Super-reduced | 0% | 4% | 2.1% |
The main difference between Andorra’s IGI and the equivalent taxes in neighbouring countries lies in the tax rates. With a standard rate of 4.5%, Andorra applies one of the lowest consumption taxes in Europe, well below Spanish VAT and French VAT. In addition, the reduced and special rates are also considerably more competitive.
IGI rates applicable in Andorra
Andorran legislation establishes several tax rates:
Standard rate: 4.5%
This rate applies to the majority of goods and services sold in Andorra.
Super-reduced rate: 0%
Applicable to certain essential services established by Andorran legislation.
Reduced rate: 1%
Reserved for specific products and activities.
Special rate: 2.5%
Applicable to certain services defined by tax regulations.
Increased rate: 9.5%
Applied mainly to certain financial services.
Who has to pay IGI?
Although the final consumer ultimately bears the cost of the tax, businesses and self-employed professionals are responsible for collecting and declaring it.
For this reason, any business operating in Andorra must understand its obligations regarding IGI and comply with the invoicing and tax settlement procedures established by current legislation.
Differences between IGI and other taxes in Andorra
IGI is an indirect tax on consumption. This means it applies to the purchase and sale of goods and services.
However, within the Andorran tax system there are other taxes that affect individuals and legal entities, such as Personal Income Tax (IRPF), Corporate Income Tax and the taxation of certain capital gains.
Each of these taxes serves a different purpose and applies in different circumstances.
