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Andorra vs Iceland
Tax Rate Comparison

Enter your income below for a personal tax estimate, then scroll down for full rate breakdowns.

๐Ÿ‡ฆ๐Ÿ‡ฉ Andorra
vs
๐Ÿ‡ฎ๐Ÿ‡ธ Iceland
Tax Year:

๐Ÿ’ฐ Personal Income Tax Calculator

Enter your income to see your estimated annual tax liability in each country โ€” side by side.

Enter your annual income above to see your personal tax comparison โ†’
Individual Income Tax (Top Marginal Rate)
Top Income Tax Rate
0โ€“10%
10% top; EU alignment reforms ongoing
No change
~36.94%
Stable; municipal rates adjusting slightly
No change
VAT / GST / Sales Tax
VAT / GST / Sales Tax
4.5%
4.5% IGI โ€” lowest in Europe
No change
11โ€“24%
Standard 24% maintained; EEA rules apply
No change
Corporate Tax Rate
Corporate Tax Rate
10%
10% IS; EU Association Agreement compliance
No change
20%
20% stable
No change
Capital Gains Tax
Capital Gains Tax
0%
No CGT โ€” key differentiator
No change
22%
22% capital income rate
No change
Social Security & Payroll
Social Security / Payroll
~21.5%
CASS stable; healthcare system well-funded
No change
~14.5%
Pension reform debate; high mandatory rates maintained
No change
State, Regional & Local Taxes

๐Ÿ‡ฆ๐Ÿ‡ฉ Andorra โ€” Parish Taxes & Local Levies

Andorra's 7 parishes (parrรฒquies) levy communal taxes including building and land taxes, commercial licence fees, and local service charges. Andorra only introduced a personal income tax (IRPF) in 2015 and corporate tax (IS) in 2012. This micro-state in the Pyrenees between France and Spain remains a significant tax haven due to very low VAT and no inheritance or capital gains tax. It has an Association Agreement with the EU.

๐Ÿ‡ฎ๐Ÿ‡ธ Iceland โ€” Municipal Income Tax

Iceland's 69 municipalities set their own local income tax rates, ranging from ~12.44% to ~14.52%, averaging ~14.45%. This is added to the national income tax. The combined effective rate for most earners is about 36.94% (national + municipal). Iceland has no inheritance tax on direct heirs. Real estate transfer tax (stimpilgjald) is 0.8% on property transfers. Iceland is not an EU member but belongs to the EEA, affecting VAT and trade rules.

โš ๏ธ Disclaimer: Rates shown are standard top/headline rates for informational purposes. Actual tax liability depends on income level, residency, deductions, and tax treaties. 2025โ€“2026 data reflects announced or enacted rates and may be subject to change. Not financial or legal advice.

Andorra vs Iceland: Key Tax Differences (2026)

๐Ÿ’ฐ Income Tax: ๐Ÿ‡ฎ๐Ÿ‡ธ Iceland has a higher top income tax rate (0โ€“10% vs ~36.94%). ๐Ÿ‡ฆ๐Ÿ‡ฉ Andorra is more favourable for high earners.

๐Ÿ›’ VAT/Sales Tax: Iceland has a higher consumption tax (4.5% vs 11โ€“24%).

๐Ÿข Corporate Tax: ๐Ÿ‡ฆ๐Ÿ‡ฉ Andorra offers a lower corporate rate (10% vs 20%), which can influence business location decisions.

๐Ÿ“ˆ Capital Gains: ๐Ÿ‡ฆ๐Ÿ‡ฉ Andorra taxes investment gains at a lower rate (0% vs 22%), benefiting investors.

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