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On July 28, 2025, the National Court of Spain issued a ruling that could significantly impact residents in Andorra who rent out properties in Spain<\/strong>.<\/p>\n Until now, only EU and EEA residents could deduct rental expenses<\/strong>. Residents in Andorra were excluded and treated unfairly for tax purposes.<\/p>\n The court has confirmed that this restriction goes against the EU principle of free capital movement<\/strong>. This means tax residents in Andorra<\/strong> can now deduct these expenses when filing the Non-Resident Income Tax (IRNR)<\/strong>.<\/p>\n This change also allows you to review past tax returns and claim <\/strong>any overpaid amounts<\/strong>.<\/p>\n The ruling does not yet cover the higher tax rate<\/strong> for non-EU residents (24%)<\/strong> compared to 19%<\/strong> for EU\/EEA residents. Still, it\u2019s an important step that could have practical implications for many Andorran taxpayers.<\/p>\n It remains to be seen whether the State Attorney\u2019s Office will appeal to the Spanish Supreme Court. Meanwhile, the ruling reinforces that this kind of tax discrimination should not continue.<\/p>\n If you are a tax resident in Andorra with rental properties in Spain<\/strong>, now is a good time to review your situation and see if you can adjust past returns or claim refunds.<\/p>\n