Exit Tax Spain→Andorra: thresholds, valuation, and planning under Art. 95 bis LIRPF

Regulatory framework in Andorra

This page summarises the applicable regulatory context and the services BMC provides from the local office. For specific situations, we recommend individual analysis: each case depends on fiscal residence, the nature of the assets, cross-border ties, and applicable administrative deadlines.

BMC services in Andorra

The following services are available from the local office by appointment or coordinated from Madrid:

• Exit tax
• International tax
• Beckham Law
• Tax planning

Typical cases in Andorra

• Art. 95 bis thresholds: 10 of 15 years + €4M value or 25% shareholding
• Mark-to-market valuation of shareholdings
• Deferral option (5 years, guarantee required in some cases)
• Beckham carve-out: years under Art. 93 do not count
• Exit tax filing in the year of departure
• Coordination with the post-relocation Andorran tax plan

Typical documentation

To open a file we typically request: identity document, certificate of fiscal residence (where applicable), documentation of the assets or transaction, relevant administrative certificates, and, for cross-border transactions, equivalent certificates from the foreign jurisdiction. The exact details depend on the type of file.

Languages of service

• Spanish
• English
• French

How to schedule a meeting

In-person meetings at the BMC Andorra office by appointment, Monday to Friday. Remote coordination available by video conference. To open a file, contact us via the office contact form or the general enquiry form.

Exit Tax Spain→Andorra: the tax that surprises entrepreneurs who do not plan for it

Art. 95 bis LIRPF (introduced by Ley 26/2014) taxes unrealised gains on shareholdings in entities when a Spanish fiscal resident loses that status. Its purpose is to prevent taxpayers from transferring their fiscal residence to lower-tax territories immediately before selling their shareholdings, thereby avoiding Spanish taxation on gains accrued during their period of Spanish residence.

On relocation to Andorra, the exit tax is the most significant and least anticipated fiscal cost. Entrepreneurs holding shareholdings in companies that have grown substantially in value may face an exit tax assessment of hundreds of thousands of euros in the year of departure, calculated on gains that have not yet been realised in cash.

When Art. 95 bis LIRPF is triggered: the three cumulative thresholds

The exit tax is triggered when all of the following are met simultaneously:

1. Residency period: the taxpayer has been a fiscal resident in Spain for at least 10 of the 15 tax years preceding the year of the change of residence
2. Total shareholding value threshold: the aggregate market value of shareholdings in all entities exceeds 4 million euros; or alternatively
3. Alternative concentration threshold: the holding in a single entity represents ≥25% of the share capital and its market value exceeds 1 million euros

If all thresholds are met (thresholds 1 + 2, or thresholds 1 + 3), Art. 95 bis taxes the unrealised gain (the difference between market value and acquisition cost) on the shareholdings as if they had been sold on the last day of Spanish residence.

The Art. 95 bis.6 carve-out excludes from the 10-year count any tax years in which the taxpayer was under the inbound expatriate regime of Art. 93 LIRPF (Beckham Law). An entrepreneur who came to Spain under Beckham and has spent 6 years in the regime will typically not have accumulated 10 years of ordinary residence, so the exit tax is not triggered on departure.

Exit tax planning process: four phases before changing residence

Phase 1: Activation analysis — does Art. 95 bis apply?

The first analysis verifies whether the taxpayer meets the three thresholds:

Residency year count: only years under the general IRPF (not Beckham) are counted. If the taxpayer arrived in Spain in 2018 under Beckham (6 tax years, 2018–2023) and switched to the general IRPF in 2024, by 2026 they have only 2 years of ordinary residence: the exit tax is not triggered.

Shareholding valuation: if the current market value exceeds the thresholds, a mark-to-market valuation is required. For unlisted companies, accepted methods are DCF (discounted cash flow), comparable-transaction multiples, and adjusted net asset value. The choice of method significantly affects the exit tax base.

25% threshold: if the total holding exceeds 25% in any entity, even with a value below €4M, the alternative threshold may be triggered. All entities in which the taxpayer holds shares must be reviewed.

Phase 2: Quantification and pre-relocation planning

If the exit tax is triggered, the taxable base must be quantified and options for reducing it analysed before the change of residence:

Reducing the holding: if the holding is close to 25%, a capital increase that brings in new shareholders and dilutes the stake below 25% can eliminate the alternative threshold. This transaction must be carried out months in advance with documented valuation to avoid being challenged as tax avoidance.

Realising capital losses in advance: if the taxpayer holds other shareholdings with unrealised losses, realising those losses before relocation may offset the gains subject to exit tax.

Rigorous low-end valuation: when the business is in a down cycle, the market value of the shareholdings is lower. Planning the relocation for a year of reduced valuations (and documenting them with an expert report) can reduce the exit tax base.

Corporate restructuring: in some cases, contributing shareholdings to a Spanish holding company before relocation may modify the structure of exit tax exposure. This strategy requires careful analysis to ensure it is not classified as abusive under the anti-avoidance clause of Art. 15 LGT.

Phase 3: Exit tax filing in the Modelo 100 for the year of departure

The exit tax is settled in the IRPF return (Modelo 100) for the tax year in which the taxpayer loses Spanish fiscal residence, using the specific Art. 95 bis annex. The taxable base is the total unrealised gain, and the applicable rates are those of the savings tax base (base del ahorro):

• 19% on the first €6,000 of gains
• 21% on gains between €6,000 and €50,000
• 23% on gains between €50,000 and €200,000
• 27% on gains between €200,000 and €300,000
• 28% on the portion above €300,000 (2026)

For an entrepreneur with unrealised gains of 3 million euros, the exit tax liability can reach €770,000–€810,000.

Phase 4: Deferral options and instalment payment

Art. 95 bis.4–5 provides a special deferral regime of up to 5 years when the destination is an EU or EEA member state with an information-exchange clause. Andorra is neither EU nor EEA, which in principle excludes this automatic deferral. However:

• Andorra has a 2015 DTA with Spain that includes an information-exchange clause
• Andorra signed the CRS (Common Reporting Standard) for automatic financial data exchange
• The AEAT may accept guarantees (bank guarantee, pledge of shareholdings) as a condition for instalment payment in certain circumstances

The specific deferral options must be analysed case by case with the BMC team before the filing.

Costs and timeline of a well-planned fiscal departure

Common mistakes and how to avoid them

Relocating without verifying the thresholds. Many entrepreneurs assume the exit tax does not apply to them without having run the calculation. The error surfaces when the AEAT examines the tax year and demands payment of the tax plus late-payment interest (3.75% per annum in 2026).

Valuing shareholdings without an expert report. If the taxpayer’s valuation is lower than what the AEAT considers correct, the inspection adjusts the base upwards. An expert valuation report prepared before the relocation establishes the taxpayer’s position and makes subsequent adjustment more difficult.

Failing to file the exit tax in the Modelo 100. Omitting the Art. 95 bis filing is a serious infringement that may result in penalties of 50%–150% of the undeclared liability. The taxpayer cannot claim ignorance when dealing with a fiscally significant transaction that was professionally advised.