Andorra Corporate Tax Revenue Hits Record €158M, Up 50%

Andorra's corporate tax revenue has reached a record high of nearly 158 million euros as of 30 September, marking a 50% increase from the same period in 2024.

The government's budget execution report attributes this surge to strong economic growth and legislative changes under Law 5/2023, passed on 19 January. The law restricted deductions on corporate tax quotas, ensuring companies pay at least 3% of their profits. By late September, collections stood at 157.85 million euros—well above the 2025 budget forecast of 100.4 million and last year's figure of 105.3 million. This total includes key payments: the June regularization for 2024 and the September advance based on estimated 2025 profits.

Direct taxation overall climbed 32% to 245.6 million euros. Personal income tax (IRPF) also hit a record at 74.9 million euros, up 29% from 58.2 million in 2024. Officials noted this reflects improved economic activity and salary adjustments to counter inflation. Non-residents' income tax rose sharply to 12.75 million euros, an 81% jump from 7 million the previous year.

A new tax on foreign real estate investment, aimed at curbing such deals, has instead boosted revenues to 10.5 million euros in nine months—exceeding the full-year projection of 9.3 million and up 16% from 9 million in 2024.

Indirect taxes showed mixed results. Consumption tax fell 32% to 68.6 million euros, largely due to lower tobacco imports following last year's duty hikes and a stocking effect. However, VAT (IGI) grew 15% to 134.46 million euros, signaling stronger value creation amid stable prices.

Other revenues included fees at 32 million euros (up 4%), asset income at 42.5 million (from 36.2 million, aided by 8.4 million in FEDA dividends), and gaming taxes at 2.33 million (from 652,000 euros). Special taxes dipped slightly by 1%.

On the spending side, personnel costs reached 109 million euros (up 6%), goods and services 35.6 million (also up 6%), while financial expenses fell 1%. Investments totalled 38.7 million euros, including 3.9 million for the Massana bypass and 1.477 million for Sant Julià.

Overall, revenues outpaced expenses, yielding a provisional surplus of 155.9 million euros. Officials expect this to narrow by year-end as more investments are executed.