The Double Taxation Agreement between Andorra and Spain: cornerstone of today’s fiscal relations

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The Double Taxation Agreement (DTA) between Andorra and Spain stands as one of the most significant legal and economic milestones in the Principality’s modern history.

It came into force on 26 February 2016, after years of negotiation and fiscal reform, and today represents the foundation of bilateral tax relations between the two countries.

This agreement placed Andorra on the international map as a reliable, transparent and competitive partner, consolidating a framework of legal security and fiscal cooperation with its main neighbour and economic ally.

📜 Context and purpose of the DTA

The agreement was signed in Ordino on 8 January 2015 by Jordi Cinca (Andorra) and Cristóbal Montoro (Spain), approved by the Andorran General Council on 24 September 2015 and published in BOPA No. 70 on 14 October 2015.

Later, BOPA No. 88 of 30 December 2015 confirmed its entry into force on 26 February 2016.

The main objective is to avoid double taxation on the same income — in both Andorra and Spain — and to prevent tax fraud and evasion, following the OECD Model Convention.

This legal framework provides stability for Andorran entrepreneurs operating in Spain and for Spanish residents earning income in Andorra, promoting the free movement of capital, services and people.

⚖️ Structure and content of the agreement

The DTA consists of 27 articles and an Additional Protocol, divided into six chapters:

• Scope and definitions: defines who qualifies under the agreement and concepts such as “tax resident” and “permanent establishment”.
• Taxation of income: determines which country may tax dividends, interest, royalties, capital gains, salaries and pensions.
• Methods for eliminating double taxation: sets out the deduction or exemption systems, depending on the tax type and residence.
• Special and final provisions: includes the non-discrimination clause, the mutual agreement procedure, and Article 24 on exchange of information, aligned with OECD standards.

The text follows the OECD Model Tax Convention and regulates income taxation, establishing a modern and transparent fiscal framework.

It also governs the taxation of dividends, interest, royalties, capital gains and pensions, thereby reinforcing legal certainty and mutual trust between both jurisdictions.

➤ To understand how Andorra’s tax treaties are structured and which countries have active agreements, you can read Double Taxation Agreements (DTA) in Andorra.

💬 Exchange of tax information

The DTA replaced the former Tax Information Exchange Agreement (TIEA), in force since 2011, and introduced a regime of “foreseeably relevant” information exchange.

Since 1 January 2016, requests between both tax administrations have followed this new international standard, reinforcing transparency and compliance with OECD recommendations on cooperation and anti-money-laundering measures.

🏦 Economic and fiscal impact

The DTA’s entry into force marked a turning point in economic relations between Andorra and Spain.

As noted at the time, the ratification represented the end of Andorra’s fiscal isolation and the start of a new era of mutual trust and integration, recognising the Principality as a fully compliant and credible tax system.

This milestone enabled closer economic cooperation with neighbouring countries.

Thanks to the DTA:

• Andorran companies can operate in Spain without excessive withholding taxes.
• Spanish investors avoid double taxation on their income.
• The Andorran Government strengthens its international reputation as a trustworthy, OECD-aligned jurisdiction.

🧭 Key provisions

While all provisions are relevant, some articles stand out for their practical significance:

• Article 4 – Tax residence: defines residence criteria in cases of dual domicile, prioritising the centre of vital interests.
• Article 10 – Dividends: limits source-country withholding to 5% or 15%, depending on shareholding.
• Article 11 – Interest: sets a 5% cap on gross payments.
• Article 12 – Royalties: also limits withholding to 5%.
• Article 21 – Elimination of double taxation: allows deduction of tax paid in the other country.
• Article 24 – Exchange of information: regulates administrative cooperation between tax authorities, ensuring confidentiality and protection.

➤ The full text can be consulted in Catalan in the BOPA or in Spanish in the BOE.

🌍 Strategic importance for Andorra

The DTA with Spain was the first double taxation agreement signed by Andorra and marked the beginning of its international opening.

Today it remains the cornerstone of Andorra’s tax relations, forming the basis for subsequent agreements with France, Portugal, Luxembourg, the Netherlands and the United Arab Emirates.

➤ To better understand the Andorran tax system and its competitive advantages, you can read Taxation in Andorra: structure, rates and real advantages

Ultimately, the DTA not only prevents double taxation but also ensures legal certainty, encourages foreign investment, and establishes a stable and modern economic relationship between both states.

➤ To explore related topics, you may also read:

• Corporate Tax in Andorra
• Tax residency in Andorra: requirements and implications
• Andorra and the European Union: an ongoing association process

📞 Would you like to know how to apply the DTA to your case?

At ELYSIUM, we provide expert guidance to avoid double taxation and optimise your tax residency in Andorra with full legal security.

The adoption of this DTA marked a fundamental step and remains a key element in Andorra’s international relations today.

Contact us and we will assess your personal or business situation in detail.

Last review: November 2025