Andorra and Romania sign the Double Taxation Agreement (DTA)

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A new step in Andorra’s international tax openness

The Principality of Andorra and Romania have signed a new Double Taxation Agreement (DTA) aimed at eliminating double taxation on income and wealth, preventing tax evasion and strengthening legal certainty between both jurisdictions.

It entered into force on 12 December 2025, consolidating the country’s internationalisation strategy and expanding the network of treaties already in place with several European and non-European states.

Negotiation and approval of the DTA between Andorra and Romania

Negotiations began in Bucharest on 4–5 March 2024 and were concluded by electronic exchange with the initialling of the text on 27 March 2024.

The official signing took place in New York on 27 September 2024, during the United Nations General Assembly, by:

• Imma Tor Faus, Minister of Foreign Affairs of Andorra
• Luminița-Teodora Odobescu, Minister of Foreign Affairs of Romania

The Consell General approved the ratification on 23 January 2025 and BOPA nº 22 (19/02/2025) published the full text.

As provided in Article 28, the tax treaty enters into force once both states exchange diplomatic notifications confirming that their internal procedures have been completed, which took place on 12 December 2025.

Content and structure of the agreement: key points

The DTA is based on the OECD Model Tax Convention and regulates essential aspects such as:

• Tax residence and tie-breaker rules
• Permanent establishment and business activity
• Employment income, professional services and other services
• Dividends, interest and royalties
• Capital gains
• Public and private pensions
• Wealth tax (explicitly included)
• Information exchange and anti-avoidance rules

The Protocol expands the definition of “royalties” to include software and audiovisual broadcasts and defines the temporal scope of information-exchange obligations.

➤ To understand how Andorra’s entire treaty network works, you can consult the article Double Taxation Agreements (DTA) in Andorra

Tax treatment of income under the DTA

The convention allocates taxing rights between the two states depending on the nature of the income:

🔹Real Estate property income

Taxable in the state where the property is located. This follows the standard treatment applied in most tax treaties.

🔹Business profits

Taxed in the state of residence unless a permanent establishment exists in the other state. The treatment is also in line with standard practice.

🔹Dividends

• Maximum withholding tax:
  • 0% if the recipient company holds at least 10% for 365 days.
  • 5% in all other cases.

Very similar to the provisions contained in other tax treaties signed between Andorra and other countries.

🔹Interest

Maximum withholding tax: 3%. Full exemption when the beneficiary is a state, public body or public financial institution.

🔹Royalties

Maximum withholding: 5%. Includes copyright, patents, trademarks, software, audiovisual broadcasts and technical information.

🔹Employment income and services

Taxed where the activity is performed, subject to the 183-day rule.

🔹Artists and athletes

Income derived from these activities is taxed in the country where the performance takes place, except where the visit is financed with public funds, in which case taxation lies with the paying country.

🔹Pensions

• Private pensions: state of residence of the recipient.
• Public pensions: state of payment, with exceptions for nationals of the other state.

🔹Capital gains

The treatment varies depending on the type of income.

• Real Estate property and permanent establishments: state of location.
• Shares in companies with predominantly immovable assets: state of the underlying property.
• Other gains: state of residence of the alienator.

🔹Wealth

Unlike other tax treaties, wealth is expressly regulated, whereas in many cases it is not mentioned at all.

• Immovable property and permanent establishments: state of location.
• Other assets: state of residence.

➤ To explore the general Andorran tax framework, see Taxation in Andorra: structure, rates and real advantages.

Entry into force and application

According to Article 28:

• The DTA will enter into force once both states exchange diplomatic notifications.
• It will then apply from 1 January of the following year in both Andorra and Romania.

The treaty entered into force on 12 December 2025, meaning that its application will be fully effective as of 1 January 2026.time.

Why this DTA matters for Andorra

The agreement with Romania strengthens:

• Andorra’s alignment with OECD and BEPS standards
• Legal certainty for businesses, investors and professionals
• The internationalisation of Andorra’s service sector
• Protection against double taxation and tax avoidance

This DTA consolidates Andorra’s position as a modern, secure and internationally aligned jurisdiction.

➤ To learn more about tax residence, see Tax residency in Andorra: requirements and real advantages.

Conclusion: a strategic convention awaiting entry into force

The Double Taxation Agreement Andorra and Romania is another step in Andorra’s fiscal and economic internationalisation. Although not yet applicable, it establishes a stable and internationally aligned framework.

If you wish to analyse how this DTA may affect your activity, your business structure or your investments, you can request your personalised meeting just below, or complete the contact form.

Last reviewed: November 2025