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.

Although it has not yet entered into force, its official publication in the BOPA on 19 February 2025 reinforces Andorra’s internationalisation strategy and expands its network of tax treaties with 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.

According to Article 28, the DTA will enter into force once both states exchange formal diplomatic notifications confirming that domestic procedures have been completed. As of today, it is not yet applicable.

🧩 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:

Immovable property income

• Taxable in the state where the property is located.

Business profits

• Taxed in the state of residence unless a permanent establishment exists in the other state.

Dividends

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

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

• Taxed where the performance takes place, unless funded by public sources.

Pensions

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

Capital gains

• Immovable 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

• 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 convention is not yet in force and therefore has no practical application at this 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