On 21 February 2025, the UK and Andorra formalized their first double tax treaty, aimed at preventing double taxation and fostering economic cooperation between the two nations.
The agreement applies to the following taxes:
- In the UK: Income tax, corporation tax, and capital gains tax.
- In Andorra: Corporate income tax, personal income tax, tax on income for fiscal non-residents, and tax on the appreciation of immovable property.
The treaty will come into effect once both countries have completed their respective legal processes and officially notified each other through diplomatic channels. Once in force, its provisions will apply as follows:
- For taxes withheld at source: From payments made or credited from the first day of the second month after the treaty takes effect.
- For income tax and capital gains tax: From the beginning of the tax year starting on or after 6 April following the treaty’s entry into force.
- For corporation tax: From the start of the financial year beginning on or after 1 April following the treaty’s effective date.
This marks the first formal double tax treaty between the UK and Andorra, reflecting a step forward in bilateral tax relations.