Everything you need to know about the Double Taxation Agreement in Andorra
In today's blog we will talk about the Double Taxation Agreement (DTA) in the Andorran territory.
But in order to be able to introduce the concept of Double Taxation Agreement, it is first necessary to define the term double taxation which occurs when the same income is subject to two or more similar taxes in the same fiscal period, a situation in which those taxpayers who reside in two countries for tax purposes.
Faced with this problem, there was a need to establish measures to avoid cases of double taxation. Thus, Double Taxation Agreements (DTAs) emerge which allow taxpayers not to be taxed twice for the same income, however, these measures have favored the liberalization of foreign investments in Andorra and the opening of national economy
On the other hand, it should be borne in mind that all direct taxes on income (IS, IRPF, IRNR and capital gains tax) are subject to the application of the double taxation agreement (DTA).
Currently, Andorra has 9 Double Taxation Agreements (DTAs) signed and in force, which are:
- CDI Andorra- French Republic (entered into force on 01/07/2015), edict and agreement.
- CDI Andorra-Spain (entered into force on 02/26/2016), edict and agreement.
- CDI Andorra-Luxembourg (entered into force on 03/07/2016), edict and agreement.
- CDI Andorra-Liechtenstein (entered into force on 21/11/2016), edict and agreement.
- CDI Andorra-Republic of Portugal (entered into force on 23/04/2017), edict and agreement.
- CDI Andorra-United Arab Emirates (entered into force on 01/08/2017), edict and agreement.
- CDI Andorra-Malta (entered into force on 27/09/2017), edict and agreement.
- Cyprus (entered into force on 11/01/2019), edict and agreement.
- Republic of San Marino (entered into force on 12/31/2021), edict and agreement.
However, this list is constantly growing and expanding, giving rise to new agreements regularly, as is the case with CDIs that are just being established together with Monaco, Hungary, the Netherlands, the Czech Republic, Croatia and the Kingdom united
Therefore, for foreign investors or entrepreneurs who wish to establish a company in the Principality of Andorra, it is important to take into account the existence of Double Taxation Agreements between both countries. In addition, one of the requirements that will have to be presented is the certificate of fiscal residence, which at RS Thomas we can help you process.
Finally, if you require tax advice or are looking to apply for a residence permit, do not hesitate to contact us.