Key Takeaways
- The Wegzugsteuer (§6 AStG) applies if you hold 1%+ of a corporation and were resident 7 of the last 12 years.
- It taxes the unrealised gain in those shares on emigration.
- Since the 2022 reform, the tax is generally payable in 7 annual instalments against security — no open-ended deferral.
- German nationals can face extended limited German tax on German-source income for up to 10 years.
- Germany and Andorra have no comprehensive double-tax treaty, only information exchange.
Moving from Germany to Andorra can cut income tax from roughly 45–48% to a maximum of 10%. The obstacle is the German exit tax (Wegzugsteuer, §6 AStG): if you hold 1% or more of a corporation and were resident long enough, Germany taxes the unrealised gain in those shares when you leave. Since the 2022 reform the tax is generally due in seven annual instalments against security — there is no longer an open-ended interest-free deferral for EU moves, and Andorra as a third country is treated at least as strictly.
The upside
Germany’s top rate is about 45% (plus the solidarity surcharge and, for many, church tax), capital gains on shares are taxed at ~26.4%, and there is inheritance and gift tax up to 50%. Andorra caps income at 10%, has no wealth, inheritance or gift tax, and taxes most capital gains at 0%. For a Mittelstand owner or an investor, the gap is very large.
The Wegzugsteuer (§6 AStG)
The German exit tax applies where:
- you hold 1% or more of a corporation (German or foreign), and
- you were subject to unlimited German tax for at least 7 of the last 12 years.
On emigration, Germany treats you as if you had sold those shares at market value and taxes the deemed gain (roughly 26.4% on 60% of the gain for substantial holdings under the partial-income method — the exact mechanics need an adviser).
Deferral since 2022
The old rules gave an indefinite, interest-free deferral for moves within the EU/EEA. The 2022 reform (ATAD implementation) removed that. Now, broadly, the tax is payable in seven equal annual instalments, usually against the provision of security, whether you move inside or outside the EU. A move to Andorra — a third country — gets no better treatment, and the tax authority can require full security up front.
There are relief mechanisms: the charge can be reduced or refunded if you return to Germany within a set period, or in some cases if the company distributes or you actually sell. These are technical and must be handled with a German adviser.
What else to plan
- The date and completeness of the move. Germany taxes worldwide income while you are resident; you must genuinely give up your German residence (deregister, give up the German home, move your centre of life).
- Extended limited tax liability. German nationals moving to a low-tax country can remain subject to extended limited German taxation on German-source income for up to ten years — check whether this bites in your case.
- Inheritance tax reach. German inheritance and gift tax can continue to apply for a period after emigration for German nationals.
- Pre-move restructuring (for example converting a GmbH holding, or realising gains before the clock matters) must be done with advice, as anti-abuse rules apply.
The Andorran side
Active residency through an Andorran company if you keep working, passive residency if you live off capital. The non-refundable €50,000 AFA payment and the day requirements (183 active, 90 passive) apply. Note that Germany and Andorra do not currently have a comprehensive double-taxation treaty, only an information-exchange agreement, so double-tax relief on any remaining German-source income relies on domestic rules — another reason to take advice.
Frequently asked questions
Does Germany have an exit tax when you move to Andorra?
Yes. The Wegzugsteuer (§6 AStG) applies if you hold 1% or more of a corporation and were resident for 7 of the last 12 years. It taxes the unrealised gain in those shares on departure.
Can I defer the German exit tax by moving to Andorra?
Only in instalments. Since 2022 the tax is generally payable in seven annual instalments against security, with no open-ended deferral — and a third-country move like Andorra is treated at least as strictly as an EU one.
Is there a double-tax treaty between Germany and Andorra?
Not a comprehensive one — only an agreement on the exchange of tax information. Relief on any remaining German-source income relies on domestic law.
Is moving from Germany to Andorra worth it?
For a company owner or investor the recurring saving is very large. Whether it makes sense overall depends on the size of your shareholding and the exit-tax bill — model it with a German adviser first.
Last reviewed: 3 September 2026. General information, not legal or tax advice. The German exit tax is technical and was reformed in 2022; use a German tax adviser and an Andorran adviser together before relocating. Speak to our team.
