Andorra vs Luxembourg: full comparison (taxes, residency, daily life)

The comparison at a glance

The Luxembourg rates are national statutory rates (2026 edition, including the local share for income and companies). They do not take account of special regimes or social contributions.

Why compare Andorra and Luxembourg

For French people in the east of the country, Luxembourg is a place to work. For those who want to settle outside France, comparing it with Andorra sets two small, wealthy states with very different profiles against each other.

Andorra attracts people first through its taxation: a single-rate income tax, a low corporate income tax and a consumption tax far below most European countries. But it is not just a matter of rates: settling there requires genuine residency, housing in a narrow market and adapting to life in the mountains.

Taxation in figures

On consumption. For €1,000 of purchases before tax, the tax is €45 in Andorra (general IGI) against €170 in Luxembourg (VAT at the standard rate).

On companies. For €100,000 of profit, corporate income tax is €10,000 in Andorra against €23,900 in Luxembourg at the combined statutory rate.

On income. Andorra applies a single rate after an exempt minimum, with a capped allowance: the effective tax is therefore much lower than the top rate in Luxembourg. Simulate your own case below.

How Luxembourg taxes its residents

Luxembourg taxes residents under a progressive scale by tax class, with high social contributions and a consumption tax among the lowest in the European Union. A large share of the workforce is cross-border, notably French. The country is a financial centre with high salaries.

What you need to become a resident in Andorra

Moving your residence to Andorra is not a simple relocation: you need a residence permit suited to your profile and a genuine presence, of at least 183 daysverified on 09/10/2026 a year to be a tax resident. For residency without gainful activity, the minimum investment is 1,000,000 €verified on 09/10/2026. See the overview of the statuses and the passive residency cost simulator.

Who should choose Luxembourg, and who should choose Andorra

Choosing Luxembourg suits those looking for a well-paid job in finance or industry, a European market and solid public services.

Choosing Andorra suits those who want lower tax, a mountain setting and lighter scrutiny of their assets, without the depth of the Luxembourg job market.

The pitfall to avoid

Simulate the gap for your situation

Enter your figures: the comparison tool calculates your Andorran tax and the gap with Luxembourg on consumption and on a company's profits.

Compare with another country

What if you are French?

A French person who settles in Andorra remains subject to French connecting rules: a single criterion is enough to remain tax-domiciled in France. Test your situation with the tax domicile tool and read the treaty between France and Andorra.