Buying a car in Andorra: regulations, costs and taxes.

Thinking of buying a car in Andorra? Whether you’re relocating or investing, the Principality offers tax benefits and streamlined procedures for vehicle purchases. 

Cars are often cheaper than in neighboring countries, thanks to the low 4.5% IGI and absence of regional taxes. In this article, we guide you through the key requirements, costs, tax implications and professional advice available to make your decision easier.

Regulations to buy a car in Andorra

If you already live in Andorra, the process of buying a car is fairly straightforward. You can purchase new or used vehicles directly from local dealerships or private sellers. You can also buy a vehicle in another country, such as Germany, and only pay VAT.

Required documents include:

• Valid residency card
  
• Proof of registration in your parish (Comú)
  
• ITV certificate (technical inspection)
  
• Purchase contract
  
• Car insurance policy, valid in Andorra
  

Once these are ready, you will have to follow the next steps:

1) Contact freight forwarders a few days in advance so that they can prepare the customs file, sending the invoice, the original registration certificate, and the COC (certificate of conformity).

2) Go to customs with the documentation; for exports from the EU, you will also be asked for Andorran insurance, the COC, and an appointment at the ITV.

3) Have the MOT inspection carried out in Aixovall (Andorra).

4) Complete the paperwork at the Government offices, where you will obtain the “Carta Groga” (equivalent to the registration card) and collect the license plates.

For non-residents

Non-residents cannot register a car in their name. However, you have options:

• Register the vehicle under a company name
  
• Wait until residency is approved
  

Costs associated with car purchase

One of the biggest advantages of buying a car in Andorra is the lower cost. Reasons include:

• 4.5% indirect tax (IGI), compared to 20-21% VAT elsewhere
  
• No internal customs duties
  
• Lower dealership operating costs
  

This can lead to savings of several thousand euros, especially on premium or luxury models.

Additional costs

Even with tax savings, certain expenses apply:

• Registration fee (€200–€300)
  
• Annual road tax (€80–€200)
  
• Insurance (€400–€1200/year)
  
• Technical inspection (after 4 years): €30–€50
  

Tax benefits when buying goods in Andorra

Minimal tax burden

One reason expats choose Andorra is the favorable tax framework. When buying goods in Andorra, the savings are evident:

• IGI at only 4.5%
  
• No regional or municipal levies
  
• Straightforward fiscal treatment for imported or company-owned assets
  

Business vehicle advantages

Entrepreneurs in Andorra can register company cars, deducting the related expenses such as insurance, maintenance, and fuel—provided the use is business-related and properly documented.

Importing a car when relocating

You may bring your current car into Andorra if you’re moving to the country.

Key requirements

• Official residency status
  
• Car registered in your name for over 6 months
  
• Proof of purchase or market value
  
• Compliance with Andorran emissions rules
  

Exemptions on relocation

New residents can import their car tax-free if done within 12 months of obtaining residency. This benefit is frequently used by individuals relocating permanently.

Paperwork and steps

1. Confirm your residency
   
2. Purchase or import the vehicle
   
3. Secure valid insurance
   
4. Pay required taxes and fees
   
5. Register the car with the traffic department
   
6. Schedule technical inspection if needed
   

Why work with a professional advisor

Working with a specialist like MCA Assessors ensures a smooth, compliant experience. We assist with:

• Regulatory reviews
  
• Tax strategy and deductions
  
• Import documentation
  
• Choosing reliable local dealerships
  

Our bilingual team provides tailored guidance for international clients who value efficiency and compliance.

Buying a car in Andorra is a smart move for residents and entrepreneurs looking to save money and enjoy legal simplicity. Whether you’re relocating or investing in assets, understanding the rules is key. Let our experts support your journey.

Get in touch with MCA Assessors for expert support designed around your needs.