The most useful question is not 'which jurisdiction has the lowest headline tax rate' but 'what does the effective ten-year burden look like for my actual situation'. The answers are less obvious than the brochures suggest.

The scenario

Take a UK-resident family considering relocation. EUR 5 million in a primary residence at the destination. EUR 1 million in annual taxable income, of which EUR 400,000 is Spanish/Monégasque/Andorran-source (if applicable) and EUR 600,000 is foreign-source (dividends from a UK or Luxembourg holding, royalties, pension drawdowns). Two adult dependants. A planned ten-year hold. The question: what is the effective tax burden over the decade?

Spain under the Beckham Law

Six years of 24 per cent flat tax on the EUR 400,000 Spanish-source income (EUR 96,000 a year × 6 = EUR 576,000 cumulative). The EUR 600,000 foreign-source income is excluded from Spanish tax under Beckham. After year six, the regime expires and the applicant either leaves Spain or transitions to the standard resident scale, which on EUR 1M of mixed income would run approximately EUR 380,000 a year in personal tax. Over years seven to ten, that is EUR 1.52M cumulative. Total Spanish income tax over ten years: approximately EUR 2.1M. Wealth tax on Spanish-situated assets adds EUR 50,000 to EUR 200,000 cumulatively depending on the autonomous community.

Andorra under the passive residency regime

Andorran IRPF on EUR 1M of personal income, with the 10 per cent cap, generates approximately EUR 96,000 a year in tax (the cap applies after the allowance), or EUR 960,000 over ten years. No wealth tax, no inheritance tax. The entry cost is the EUR 1M deployed in qualifying assets (which remains the applicant's capital, but illiquid) plus the EUR 50,000 non-refundable AFA payment plus EUR 24,000 in non-refundable per-dependant payments. Total Andorran income tax over ten years: approximately EUR 960,000.

Monaco under Loi 1.548

Monaco taxes personal income at 0 per cent for non-French nationals. The EUR 1M annual income generates zero personal income tax over ten years. The cost is structural rather than recurring: droits de mutation on the EUR 5M property at 4.75 per cent (transparent route, via a Monégasque SCI) is EUR 237,500 at entry. There is no wealth tax. There is no inheritance tax on direct-line transfers. Total Monégasque income tax over ten years: zero. Total entry friction: approximately EUR 237,500 to EUR 500,000 depending on the holding structure.

The honest comparison

The headline order — Monaco lowest, then Andorra, then Spain — is correct, but the gap to second place is smaller than the brochures suggest. Monaco saves approximately EUR 1.4M to EUR 2.1M over a decade compared to Spain, but costs significantly more to enter and live in (annual cost of living in Monaco exceeds Andorra and Spain by approximately EUR 200,000 a year for a comparable lifestyle). Andorra saves approximately EUR 1.1M to EUR 1.5M against Spain, with lower entry costs and lower living costs, but a 90-day-per-year presence requirement that some applicants find restrictive.

Why Spain still wins for most applicants

The honest answer is that Spain works for more relocators than Monaco does. The Beckham Law's six-year window is shorter than ideal, but for a family planning a ten-to-fifteen-year hold who values lifestyle access to the Costa del Sol or Mallorca, the after-tax position is competitive enough that the additional rigidity of Andorra or the structural costs of Monaco do not justify the move. Monaco only wins when the income is genuinely large and the buyer values the social environment alongside the tax position.

Source: HMRC — RDR3: Statutory Residence Test guidance note

Source: HMRC — Residence, Domicile and Remittance Basis Manual (RFIG20030)