Introduction
Automatic tax information exchange in Andorra: the European Union Council’s decision to adapt the agreement with Andorra to the new Common Reporting Standard (CRS) of the OECD marks a significant turning point. Starting January 1, 2026, automatic tax information exchange between Andorra and EU countries will be carried out with new technical and legal requirements. In this article, we explain what this change entails, how it affects residents, investors, and businesses, and what practical steps you should consider if you’re thinking about moving or investing in Andorra.
What Changes with the New Protocol
The amending protocol updates the bilateral framework to align with the OECD revised standard and ensures that the automatic tax information exchange in Andorra meets international requirements. This involves:
- More detailed data transmission (balances, yields, interests, and financial movements).
- Technical and security obligations for Andorran financial institutions.
- Greater coordination between tax authorities to detect fraud and evasion.
The goal is clear: to integrate Andorra’s automatic tax information exchange into the global tax cooperation system and improve transparency between jurisdictions.
Who Is Affected?
The changes impact various profiles:
- Tax residents in Andorra with accounts in financial institutions of other EU countries.
- EU residents with accounts in Andorra: their data may be automatically shared with their national authorities.
- Businesses and professionals with cross-border activities utilizing Andorran financial services.
- People planning to move to Andorra or invest from abroad.
Ultimately, the automatic tax information exchange in Andorra affects both current residents and those considering relocating for tax reasons or quality of life.
Obligations for Entities and Practical Consequences
The protocol sets technical and legal obligations to ensure that Andorran financial institutions report regular information to tax authorities. Key aspects include:
- Periodic reporting of account data: balances, yields, interest, and relevant transactions.
- Implementation of secure transmission systems compliant with CRS standards.
- Administrative cooperation for specific information requests.
This means that from 2026, the automatic exchange of tax information in Andorra will be more detailed and frequent, aiding authorities in identifying inconsistencies and tax evasion.
Impact for Those Moving or Investing in Andorra
If you are considering changing your tax residence or investing in Andorra, it is important to consider several practical points:
- Review your prior tax situation before relocating: to avoid surprises and comply with obligations in your home country.
- Bank transparency: accounts in Andorra will be subject to automatic exchange with the EU.
- Tax planning and professional advice to adapt your asset structure.
The automatic tax information exchange in Andorra does not necessarily indicate problems but highlights the importance of declaring and properly organizing income and assets before and after relocating.
Practical Tips Before Moving
We recommend taking specific steps to minimize risks and leverage the legal advantages of relocating to Andorra:
- Consult a tax advisor about your personal situation and the implications of the agreement.
- Review and regularize pending declarations in your home country.
- Document your new residence and justify physical presence and center of interests to comply with tax residency regulations.
- Learn about the healthcare, education, and costs: useful resources are in our internal guides such as Benefits of Living in Andorra and Residency in Andorra.
With the implementation of automatic tax information exchange in Andorra, increased transparency underscores the need for proper planning.
Frequently Asked Questions
Does this mean I will lose financial privacy?
The protocol involves more data exchange between authorities, not the elimination of legal guarantees regarding information handling. However, it does reduce fiscal anonymity and requires greater diligence in managing your assets.
Does this affect residents and non-residents equally?
It mainly impacts accounts linked to tax residents of the EU. Nonetheless, anyone with financial ties to EU countries could be involved in information exchange processes.
What should I do if I already live in Andorra or have investments there?
Review your situation with an advisor and ensure your declarations and contracts are in order. If you need practical support for moving or residence procedures, consult Moving to Andorra and Contact.
How Andorraway Can Help You
At Andorraway, we offer comprehensive guidance for those planning to relocate, invest, or establish a company in Andorra. We can help you:
- Assess the fiscal impact of the automatic tax exchange in Andorra on your specific case.
- Manage the necessary documentation for residency and administrative procedures.
- Connect with local fiscal and legal advisors for planning and compliance.
Check out our guides on taxes and residency: Taxes in Andorra and Residency in Andorra to start planning securely.
Summary and Next Steps
The ratification by the EU Council means that from 2026, the automatic tax information exchange with Andorra will align with international standards. For those living, moving, or investing in Andorra, transparency and prior tax planning are key. We recommend:
- Seeking specialized tax advice.
- Regularizing your tax situation in your home country before relocating.
- Using reliable resources to inform yourself about residency, taxes, healthcare, and costs: for example, Benefits of Living in Andorra and Healthcare System.
If you need a personalized assessment of how the automatic tax information exchange in Andorra impacts your case, contact us at Contact and we will guide you through every step of your move or investment.