The Double Taxation Convention (DTC) between Andorra and the United Kingdom, signed on 20 February 2025, entered into force on 22 December 2025. The edict was published in the BOPA (Official Gazette of the Principality of Andorra), No. 157/2025, dated 31 December 2025.
This treaty removes the uncertainty that previously affected cross-border transactions between the two jurisdictions by setting out clear rules on: (i) which State taxes which income, (ii) how double taxation is eliminated, and (iii) which anti-abuse safeguards apply.
A. Entry into force vs. effective application
As is often the case in treaty matters, it is important to distinguish between entry into force and effective application (i.e., from when the Convention produces effects for each tax). The Convention sets out these rules in Article 28.
I. Andorra
- Taxes withheld at source: applies to income derived from 1 January 2026.
- Other taxes on income and taxes on capital: applies to tax periods beginning on or after 1 January 2026.
II. United Kingdom
- Taxes withheld at source: applies to amounts paid or credited on or after 1 February 2026.
- Income tax and capital gains tax: applies for tax years beginning on or after 6 April 2026.
- Corporation tax: applies for financial years beginning on or after 1 April 2026.
B. Two important points to keep in mind
I. Arbitration
The arbitration clause (Article 24(5)) will not take effect until the States notify each other, through diplomatic channels, that this provision has entered into force.
II. Exchange of information
Information requests may cover earlier periods (with specific rules for Andorra and without being tied to a particular tax period in the case of the United Kingdom).
I. Andorra
- Cases involving intentional conduct that may be subject to criminal prosecution: requests may relate to tax periods beginning on or after 1 January 2013 (or, where there is no tax period, to taxes arising on or after that date).
- All other cases: requests may relate to tax periods beginning on or after 1 January 2017 (or, where there is no tax period, to taxes arising on or after that date).
II. United Kingdom
- Requests may be made regardless of the tax period to which the matter relates (i.e., without an equivalent time limitation in the provision itself).
C. Key provisions
We invite you to read our analysis of the Convention’s key provisions here.
If you would like to understand how this Convention may affect your investments or income, Carlota Pastora Business Law Firm & Wealth Planning has a team specialised in international taxation to review your specific circumstances, help you define the most efficient strategy, and maximise the treaty’s benefits.
FAQs – Andorra–United Kingdom Double Taxation Agreement
The Double Taxation Agreement (DTA) between Andorra and the United Kingdom is an international treaty that determines which State has the right to tax certain types of income and how double taxation is eliminated when an individual or company earns income in both countries.
Although the Agreement entered into force on 22 December 2025, its effective application depends on the type of tax and the country concerned. In general terms, it applies from January 2026 in Andorra and between February and April 2026 in the United Kingdom, depending on the relevant tax.
The DTA covers, among others, personal income tax, corporation tax, withholding taxes (dividends, interest, royalties), capital gains tax and capital taxes (in the case of Andorra).
The Agreement provides mechanisms such as the exemption of income in one of the States or the crediting of tax paid in the other country, subject to specific conditions and limitations depending on the type of income.
The DTA sets maximum withholding tax rates at source, which in many cases are lower than those applicable in the absence of the Agreement. The specific application depends on the type of income, the beneficial owner and compliance with anti-abuse requirements.
Yes. The treaty incorporates anti-abuse safeguards aligned with international standards (BEPS), preventing access to treaty benefits where structures lack economic substance or pursue solely an undue tax advantage.
Yes. The Agreement allows requests for the exchange of tax information to cover periods prior to its entry into force, with specific rules in the case of Andorra and without an equivalent time limitation for the United Kingdom.
The Agreement provides greater legal certainty and tax predictability, which is particularly relevant for investors holding assets in both countries, entrepreneurs with international structures and individuals earning cross-border income. However, the specific impact must be analysed on a case-by-case basis.
