Andorra vs France Taxes 2026: Income, Wealth, VAT Compared
Contents
- Income Tax: Five Brackets vs Three
- Social Contributions: ~45% Employer Cost vs 22% Total
- A Worked Example: €120,000 Salary
- Investment Income: PFU 30% vs 10% Flat
- Wealth and Inheritance: IFI and 45% vs Nothing
- VAT: 20% vs 4.5%
- Leaving France: the Exit Tax (Article 167 bis)
- The Cross-Border Alternative
- Becoming an Andorran Resident
- Bottom Line
France and Andorra share a border, a co-prince, and not much else when it comes to tax. A French resident earning a good salary hands over close to half of it once income tax, CSG/CRDS and social contributions are counted. The same person, resident in Andorra, keeps roughly 86 cents of every euro. This guide compares the two systems line by line for 2026 — income tax, social charges, investment income, wealth and inheritance, VAT, and what it actually takes to make the move.
Income Tax: Five Brackets vs Three
France applies a progressive impôt sur le revenu with five brackets in 2026:
| Taxable income (per part) | France rate |
|---|---|
| Up to €11,497 | 0% |
| €11,497 – €29,315 | 11% |
| €29,315 – €83,823 | 30% |
| €83,823 – €180,294 | 41% |
| Above €180,294 | 45% |
On top of the barème, employment and investment income carries CSG/CRDS of 9.7%, and high earners can face the contribution exceptionnelle sur les hauts revenus of 3–4%.
Andorra’s IRPF has three brackets, unchanged since 2015: 0% up to €24,000, 5% from €24,000 to €40,000, and 10% above €40,000. There are no surtaxes, no social levies on top, and the effective rate for most residents sits well below 10%. The full mechanics are covered in our Andorra tax rates comparison and the calculator.
Social Contributions: ~45% Employer Cost vs 22% Total
French social security is the heaviest in Europe. Employees pay around 11% of gross salary; employers add roughly 45% on top. A self-employed travailleur indépendant pays around 45% of profit in charges before income tax even starts.
Andorra’s CASS splits 22% between employer (15.5%) and employee (6.5%). Self-employed residents pay a flat monthly quota — €587/month at the standard rate in 2026, with reductions for lower incomes. We break the system down in CASS contributions 2026 and how CASS works.
A Worked Example: €120,000 Salary
Using the same methodology as our calculator (single, employed, no deductions):
| Andorra | France | |
|---|---|---|
| Income tax | €8,800 | ~€32,400 |
| Social contributions (employee) | €7,800 | ~€25,600 |
| Total burden | ~13.8% | ~48.3% |
| Net in hand | ~€103,400 | ~€62,000 |
The gap — roughly €41,000 a year — compounds every year you stay. Run your own numbers, including dividends and freelance profiles, with the Andorra tax calculator.
Investment Income: PFU 30% vs 10% Flat
France taxes dividends, interest and capital gains under the prélèvement forfaitaire unique — a flat 30% (12.8% income tax + 17.2% social charges). Rental income is taxed at your marginal rate plus 17.2% social charges.
Andorra taxes savings income at 10%, with the first €3,000 of dividends and interest exempt — and dividends from Andorran companies are taxed at 0% in the hands of an Andorran resident.
Wealth and Inheritance: IFI and 45% vs Nothing
France levies the impôt sur la fortune immobilière (IFI) on real-estate wealth above €1.3 million, at rates up to 1.5%. French inheritance tax reaches 45% in the direct line — and 60% for unrelated heirs.
Andorra has no wealth tax, no inheritance tax, and no gift tax. For families with property or a business to pass on, this difference alone often outweighs the income-tax saving.
VAT: 20% vs 4.5%
France’s standard VAT is 20%. Andorra’s IGI is 4.5% — the lowest general consumption tax in Europe — which is why day-to-day living costs run lower than the price level of a border town would suggest.
Leaving France: the Exit Tax (Article 167 bis)
France applies an exit tax on unrealised capital gains when tax residents holding significant shareholdings move abroad — broadly, portfolios above €800,000 or holdings above 50%. Transfers to Andorra qualify for a sursis de paiement (payment deferral), but the paperwork matters. We cover thresholds, guarantees and the 2026 rules in the French exit tax guide.
The Cross-Border Alternative
Not ready for a full move? Living in Andorra while working for a French employer — or commuting across the Pas de la Casa border — has its own regime. See cross-border workers 2026 for how residency days, social security affiliation and the absence of a France–Andorra commuter agreement play out in practice.
Becoming an Andorran Resident
Since the Omnibus 2 Law, passive residency requires a €1 million investment; active residency (working or running a company) remains the practical route for most professionals, with substance requirements and CASS affiliation. Real costs — housing, deposits, timelines — are itemised in the real cost of moving to Andorra.
Bottom Line
| Andorra | France | |
|---|---|---|
| Top income tax | 10% | 45% (+3–4% CEHR) |
| Social levies on income | — | 9.7% CSG/CRDS |
| Social security (employee) | 6.5% | ~11% |
| Dividends | 0% domestic / 10% | 30% PFU |
| Wealth tax | None | IFI above €1.3M |
| Inheritance (direct line) | None | Up to 45% |
| Standard VAT | 4.5% | 20% |
France offers scale, services and the sécurité sociale; Andorra offers one of Europe’s lightest, simplest tax systems 90 minutes from Toulouse. If your income is mobile — entrepreneur, investor, remote professional — the arithmetic is not close. What decides the question is residency substance: 183+ days, a real home, and your economic life genuinely in the Principality.
Sources: DGFiP / impots.gouv.fr (barème 2026, PFU, IFI, art. 167 bis CGI), BOPA (Llei 5/2014 de l’IRPF, Llei 2/2026), CASS. Estimates only — not tax advice.