Andorra's Double Taxation Agreements (DTAs): Updated Guide 2026

Although many people will not know it, the Principality of Andorra has been carrying out an ambitious process of international economic opening for more than a decade, started in 2010 with the tax information exchange agreement with Spain and deepened with the new 2012 foreign investment law, thus initiating legal and fiscal changes to bring the country into line with international standards, becoming homologated and able to enter into negotiations.

One of the consequences of this transformation was the signing of the Monetary Agreement for which Andorra acquired the euro as its official currency and also represented a great advance in the possibility of signing Double Taxation Agreements (CDI)Since to ensure the proper functioning of a CDI signed by any two states, it is necessary that the tax system, the legislation on transparency, and the accounting laws be compatible.

What is a double taxation agreement (CDI)?

A convention to avoid double taxation (CDI) is an international convention or treaty that establishes mechanisms to prevent the same income obtained by a taxpayer from being taxed by two or more states (double international taxation), for the same tax event and for identical periods.

Globalization in modern societies is implying that economic relations are internalized and that their subsistence depends largely on foreign markets, thus collapsing state borders in the face of the dynamism of the economy. As each State is sovereign to develop its tax legislation, there is an overlap of fiscal sovereignties that may not be compatible with each other.. This situation can cause:

• A single person (natural or legal) is taxed in two different countries for the same income
• The same income is taxed on two different people from two different countries
• a single asset is taxed in two different countries.

A first solution to this are unilateral measures taken by the tax administrations of each state, which usually consist of deductions for such double taxation cases. But when these are insufficient, then it requires bilateral provisions such as agreements to avoid double taxation or CDI. Its objective is to clarify, unify and guarantee the fiscal situation of taxpayers who carry out economic activities in other countries.

These conventions They are usually based on models proposed by supranational organizations such as the OECD and the UN and it should be noted that have primacy over the internal law of the country as they are framed in the field of international law. Its structure usually includes, among other things, the scope of application, legal definitions and taxation rules, methods to eliminate double taxation, the protocol and some other special provisions.

¿Why CDIs are important?

CDIs facilitate the promotion of foreign investments and favor the competitiveness of national companies abroad. Its measures apply to natural and legal persons residing in any of the signatory states and affect taxes on income, on wealth or on business profits. These taxes are required by each of the contracting states and / or their political and administrative subdivisions, and in these treaties it is established which two states have the competence to tax income.

Specifically for the Principality of Andorra, its relevant importance lies, for example, in the end of the tax on withholdings at source that certain administrations, like the French or the Spanish, applied to Andorran companies that wanted to export their services to these countries. It therefore represents a great advance for the international economic opening of the country.

The Double Taxation Agreements of Andorra

As we have indicated, in order to fully consider the taxation of non-residents, it is necessary to take into account, in addition to the internal legislation on income tax for non-residents, the different international treaties and agreements that a country has signed in force. . The Principality of Andorra has signed in recent years, a series of agreements with other countries to avoid tax evasion and double taxation (CDI) of all taxes of a direct nature on income:

• corporate income tax
• the income tax of natural persons
• the income tax of non-tax residents
• capital gains tax on property transfers

The provisions of the CDI are incorporated into the legal system from their publication in the Official Gazette of the Principality of Andorra (BOPA), and cannot be modified or repealed by law. According to the Constitution, Andorran tax law recognizes the normative priority of international tax treaties or conventions as in this case the agreements to avoid double taxation. The laws of each specific tax also recognize the primacy of these agreements over the internal order.

Andorra currently has 21 CDIs in forceconsolidating its position as one of the European microstates with the largest network of tax treaties relative to its size. The countries with active double taxation treaties are: France, Spain, Luxembourg, the United Arab Emirates, Portugal, Liechtenstein, Malta, Hungary, Cyprus, Croatia, San Marino, Monaco, and the Czech Republic. Iceland (in force since May 2024), Netherlands (November 2024), South Korea (April 2025), Lithuania (April 2025), Montenegro (June 2025), Latvia (June 2025), Romania (December 2025) and United Kingdom (December 2025). In March 2026, the CDI also entered into force with Estoniabringing the total to 22 CDsAndorra continues to expand this network: Belgium The treaty has been signed but is pending formal signature, and Italy It is currently in the negotiation phase.

Progress has been especially rapid between 2024 and 2026. Treaties with Iceland, the Netherlands, South Korea, Lithuania, Montenegro, Latvia, Romania, the United Kingdom, and Estonia—which in the original drafting of this article were pending signature or ratification—have all entered into force. Belgium has the drafted text but it is still pending formal signature.Italy remains in the negotiation phase with no confirmed date. The countries with which exploratory contacts had been made (Guatemala, Uruguay, Paraguay, Mexico, Kazakhstan) have not registered any confirmed progress.

Further, Andorra continues to expand its network of bilateral relationsLatvia, Lithuania, and Iceland—mentioned earlier as countries in negotiations—already have double taxation agreements (DTAs) in force. Chile, Sweden, and other countries are in the exploratory phase, and it is very possible that these relationships will lead to new DTAs in the near future.

The most recent CDIs: 2024-2026

The CDI with Iceland was signed in February 2023 in Geneva, coinciding with the 52nd session of the UN Human Rights Council, and It came into effect on May 31, 2024It was the first Andorran double taxation agreement with a Nordic country and strengthened the Principality's presence in the financial circuits of Northern Europe.

Since then, the expansion has been remarkable. Below are the double taxation agreements (DTAs) that have come into effect since 2024, according to the Govern d’Andorra:

• Iceland — effective May 31, 2024
• Netherlands — effective November 29, 2024
• South Korea — effective April 4, 2025
• Lithuania — effective April 4, 2025
• Montenegro — in force on June 20, 2025
• Latvia — in force on June 25, 2025
• Romania — in force on December 12, 2025
• United Kingdom — in force on December 22, 2025 (effective application from January-April 2026 depending on the type of tax)
• Estonia — in force on March 24, 2026

International tax planning

Notwithstanding the foregoing, to carry out a transfer and subsequent establishment in the Principality of Andorra, as well as to operate internationally, strict compliance with all national and supranational regulations is essential. One last point we can give is that the fact that there is no CDI between Andorra and the country of origin does not necessarily mean full and effective double taxation of the income to be received. It will depend in any case on the internal legislation of each state regarding non-residents.

With a international tax planning at the hands of good professional experts lawyers, prosecutors and economists, not only will you have guaranteed correct execution in compliance with all applicable legislation, but also an optimal tax strategy that will avoid excessive taxation always outside the Law. At Abast we specialize in establishing people and businesses from all over the world in the Principality of Andorra, offering comprehensive support.