Intellectual property in Andorra: the 80% intangible assets regime and the end of the former regimes

The current regime (article 23 of the corporate income tax law)

Taxpayers who opt for this regime apply a reduction of 80 %verified on 14/10/2026 to the taxable base corresponding to positive income from grants or authorisations of use, assignments, licences or transfers of patents, utility models and computer programs protected by copyright. The reduction is calculated asset by asset.

The nexus ratio with the creation activity

The reduction applies "in proportion" to a ratio:

• Numerator: expenses directly linked to the activity of creating the asset, outsourcing to related entities that are tax resident in Andorra and carry out the activity in Andorra, and outsourcing to unrelated entities (the share carried out abroad may not exceed 25 %verified on 14/10/2026 of the numerator). These expenses are increased by 30 %verified on 14/10/2026, without being able to exceed the denominator.
• Denominator: all the expenses incurred to create the asset, including outsourcing to related entities that are non-resident or do not act in Andorra, and acquisitions of intangible assets.
• General expenses (interest, depreciation of buildings, etc.) are excluded from the ratio.

The aim is to align the benefit with a genuine development activity in Andorra, in line with the OECD recommendations against base erosion (action 5).

Conditions

The asset must be exploited in the taxpayer's own name in the taxpayer's economic activity, and the assignee of the rights of use must use them in an economic activity, without the result of that use taking the form of deliveries of goods or services giving rise to tax-deductible expenses for related entities under the conditions laid down by law.

What disappeared in 2018

Llei 6/2018 abolished the special regimes for international trade companies and for intragroup financial management and investment companies, and reduced the former intangibles regime to the exploitation of assets linked to a creation activity. A transitional regime allowed entities already authorised before 1 July 2017 to continue with a declining reduction until 31 December 2020. Any page that still presents these regimes as available is out of date.

An example to understand the order of magnitude

An Andorran company that develops software in Andorra and licenses it for 100,000 euros of income with a ratio of 100% reduces the base by 80 %verified on 14/10/2026, leaving a base of 20,000 euros taxed at 10 %verified on 09/10/2026: 2,000 euros of tax before other items.

Limits to be aware of

• The liquidated share may not be lower than 30 %verified on 14/10/2026 of the taxation share: see corporate income tax.
• Royalties received from France are subject to withholding capped at 5 %verified on 12/10/2026 by the treaty: see the treaty.
• A French tax resident who owns the company remains subject to the French rules on foreign structures under a privileged tax regime: holding company and the French tax authorities.
• Substance is the factual condition: developers, decisions and expenses in Andorra.

Who it is for

Software publishers, inventors, studios holding patents, and intellectual property holding companies backed by a genuine development team. See web and software development.