{"id":17828,"date":"2026-08-26T16:48:00","date_gmt":"2026-08-26T14:48:00","guid":{"rendered":"https:\/\/www.augelegalfiscal.com\/?p=17828"},"modified":"2026-08-26T16:48:01","modified_gmt":"2026-08-26T14:48:01","slug":"uk-andorra-double-taxation-agreement","status":"publish","type":"post","link":"https:\/\/www.augelegalfiscal.com\/en\/uk-andorra-double-taxation-agreement\/","title":{"rendered":"The UK-Andorra Double Taxation Agreement: What It Is and How It Affects You"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 300;\">For the first time in their history, the United Kingdom and Andorra have a <\/span><b>double taxation agreement (DTA)<\/b><span style=\"font-weight: 300;\">, also referred to as the UK-Andorra Double Taxation Convention. The agreement was signed in London on 20 February 2025 and <\/span><b>has been in force since 22 December 2025<\/b><span style=\"font-weight: 300;\">, taking effect for tax purposes from 2026. For any individual or company with economic interests split between the two countries (income, a property investment, dividends or a pension), this means there is now a clear rule on<\/span> <b>which State has the right to tax each type of income<\/b><span style=\"font-weight: 300;\"> and how to eliminate tax paid twice.<\/span><\/p>\n\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 300;\">This article explains, in practical terms, what the agreement covers, how it determines tax residence, how taxing rights are shared between the United Kingdom and Andorra, and what all of this means in practice. It is one more agreement within Andorra&#8217;s growing network of<\/span><a href=\"https:\/\/www.augelegalfiscal.com\/en\/andorra-double-taxation-teatries\/\" target=\"_blank\" rel=\"noopener\"> <span style=\"font-weight: 300;\">double taxation conventions<\/span><\/a><span style=\"font-weight: 300;\">, but one with particular features worth knowing.<\/span><\/p>\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_83 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #8f2b2f;color:#8f2b2f\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #8f2b2f;color:#8f2b2f\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.augelegalfiscal.com\/en\/uk-andorra-double-taxation-agreement\/#UK-Andorra_double_taxation_agreement_signing_and_entry_into_force\" >UK-Andorra double taxation agreement: signing and entry into force<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.augelegalfiscal.com\/en\/uk-andorra-double-taxation-agreement\/#Who_does_the_agreement_affect\" >Who does the agreement affect?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.augelegalfiscal.com\/en\/uk-andorra-double-taxation-agreement\/#Taxes_covered_by_the_agreement\" >Taxes covered by the agreement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.augelegalfiscal.com\/en\/uk-andorra-double-taxation-agreement\/#Tax_residence_under_the_agreement_Article_4\" >Tax residence under the agreement (Article 4)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.augelegalfiscal.com\/en\/uk-andorra-double-taxation-agreement\/#How_taxing_rights_are_shared_by_type_of_income\" >How taxing rights are shared by type of income<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.augelegalfiscal.com\/en\/uk-andorra-double-taxation-agreement\/#How_the_agreement_eliminates_double_taxation\" >How the agreement eliminates double taxation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.augelegalfiscal.com\/en\/uk-andorra-double-taxation-agreement\/#Anti-abuse_measures_and_dispute_resolution\" >Anti-abuse measures and dispute resolution<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.augelegalfiscal.com\/en\/uk-andorra-double-taxation-agreement\/#The_agreement_within_Andorras_DTA_network\" >The agreement within Andorra's DTA network<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.augelegalfiscal.com\/en\/uk-andorra-double-taxation-agreement\/#The_agreement_in_the_context_of_the_end_of_the_UK_non-dom_regime\" >The agreement in the context of the end of the UK non-dom regime<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"UK-Andorra_double_taxation_agreement_signing_and_entry_into_force\"><\/span>UK-Andorra double taxation agreement: signing and entry into force<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">This is the first bilateral double taxation agreement the United Kingdom and Andorra have ever concluded. Its path to full application followed the usual course for this type of treaty:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Signed: London, 20 February 2025<\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Ratified in the United Kingdom:<\/span><span style=\"font-weight: 300;\"> by an Order in Council of 10 December 2025 (the Double Taxation Relief and International Tax Enforcement (Andorra) Order 2025).<\/span><\/li>\n\n\n\n<li>Entry into force: 22 December 2025.<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">Once in force, the agreement takes effect on a staggered basis:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>In Andorra: for withholding taxes and for taxes on income, from 1 January 2026.<\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">In the United Kingdom:<\/span><span style=\"font-weight: 300;\"> for withholding taxes, from <\/span><span style=\"font-weight: 400;\">1 February 2026<\/span><span style=\"font-weight: 300;\">; for Corporation Tax, from <\/span><span style=\"font-weight: 400;\">1 April 2026<\/span><span style=\"font-weight: 300;\">; and for Income Tax and Capital Gains Tax, from <\/span><span style=\"font-weight: 400;\">6 April 2026<\/span><span style=\"font-weight: 300;\">.<\/span><\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 300;\">During the process, a note verbale was also issued to correct a clerical error in the article on government service, without altering the substance of the agreement.<\/span><\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_does_the_agreement_affect\"><\/span>Who does the agreement affect?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 300;\">The agreement applies to persons (individuals or companies) who are <\/span><span style=\"font-weight: 400;\">tax residents of one or both States<\/span><span style=\"font-weight: 300;\">. In practice, it is relevant for two broad profiles:<\/span><\/p>\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400;\">Individuals<\/span><span style=\"font-weight: 300;\"> resident in Andorra who receive income from the United Kingdom, or vice versa: employment income, pensions, dividends, interest, rental income or gains from the sale of property.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Companies and permanent establishments<\/span><span style=\"font-weight: 300;\"> with activity or a presence in the other country, as well as groups with corporate structures on both sides.<\/span><\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 300;\">The agreement also includes rules for fiscally transparent entities (certain partnerships or similar structures), so that income is attributed to the resident to whom it corresponds under the domestic law of each State.<\/span><\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Taxes_covered_by_the_agreement\"><\/span>Taxes covered by the agreement<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">The agreement applies to taxes on income and on capital in each country:<\/p>\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td>Andorra<\/td><td>United Kingdom<\/td><\/tr><tr><td><span style=\"font-weight: 300;\">Corporate income tax (<\/span><i><span style=\"font-weight: 300;\">impost sobre societats<\/span><\/i><span style=\"font-weight: 300;\">)<\/span><\/td><td><span style=\"font-weight: 300;\">Income Tax<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 300;\">Personal income tax (<\/span><i><span style=\"font-weight: 300;\">impost sobre la renda de les persones f\u00edsiques<\/span><\/i><span style=\"font-weight: 300;\">)<\/span><\/td><td><span style=\"font-weight: 300;\">Corporation Tax<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 300;\">Tax on the income of non-tax-residents (<\/span><i><span style=\"font-weight: 300;\">IRNR<\/span><\/i><span style=\"font-weight: 300;\">)<\/span><\/td><td><span style=\"font-weight: 300;\">Capital Gains Tax<\/span><\/td><\/tr><tr><td>Tax on capital gains from real estate transfers<\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n<p class=\"wp-block-paragraph\">It also extends to any identical or substantially similar taxes introduced in the future in addition to, or in place of, those above.<\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tax_residence_under_the_agreement_Article_4\"><\/span>Tax residence under the agreement (Article 4)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">he same person may be considered a tax resident in both Andorra and the United Kingdom under each country&#8217;s domestic rules. To resolve that conflict, the agreement sets out tie-breaker rules applied in sequence:<\/p>\n\n<ol class=\"wp-block-list\">\n<li><span style=\"font-weight: 400;\"><strong>Permanent home<\/strong>:<\/span><span style=\"font-weight: 300;\"> the person is treated as resident in the State where a permanent home is available to them.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\"><strong>Centre of vital interests<\/strong>:<\/span><span style=\"font-weight: 300;\"> if they have a home in both, the State with which their personal and economic ties are closer prevails.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\"><strong>Habitual abode<\/strong>:<\/span><span style=\"font-weight: 300;\"> if that cannot be determined, the State where they habitually live.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\"><strong>Nationality<\/strong>:<\/span><span style=\"font-weight: 300;\"> as a last resort, the State of which they are a national; and if they are a national of both or of neither, the competent authorities decide by mutual agreement.<\/span><\/li>\n<\/ol>\n\n<p class=\"wp-block-paragraph\">For legal entities resident in both States, residence is determined by mutual agreement between the authorities, taking into account the place of effective management, the place of incorporation and other relevant factors.<\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_taxing_rights_are_shared_by_type_of_income\"><\/span>How taxing rights are shared by type of income<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">The core of the agreement is to assign, for each category of income, which State may tax it. Here is the summary:<\/p>\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><span style=\"font-weight: 400;\">Type of income<\/span><\/td><td><span style=\"font-weight: 400;\">Where it is taxed<\/span><\/td><\/tr><tr><td>Income from real estate<\/td><td>In the State where the property is located (the State of residence may also tax it, with double taxation then eliminated).<\/td><\/tr><tr><td>Business profits<\/td><td>Only in the State of residence of the company, unless it operates in the other through a permanent establishment, which is then taxed on the profits attributable to it.<\/td><\/tr><tr><td>Dividends<\/td><td>General rule: 0 % withholding. Exception: 15 % where they derive from real estate income distributed by an exempt investment vehicle, unless the recipient is a pension fund (exemption).<\/td><\/tr><tr><td>Only in the State of residence of the recipient.<\/td><td>Only in the State of residence of the recipient.<\/td><\/tr><tr><td>Royalties<\/td><td>Only in the State of residence of the recipient.<\/td><\/tr><tr><td>Capital gains on real estate<\/td><td>In the State where the property is located; also gains from the sale of shares deriving their value mainly from real estate.<\/td><\/tr><tr><td>Capital gains on movable property<\/td><td>Only in the State of residence of the transferor, unless the assets are attached to a permanent establishment in the other State.<\/td><\/tr><tr><td>Pensions<\/td><td>Private: only in the State of residence of the recipient. Public: only in the State that pays them, subject to the exceptions provided.<\/td><\/tr><tr><td>Entertainers and sportspersons<\/td><td>In the State where the activity is performed.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 300;\">This allocation matters in particular for anyone moving or diversifying real estate assets between the two countries: the taxation of property and of real estate capital gains follows its own rules. If you are weighing up an operation of this kind, it is worth analysing it in detail first; it is one of the areas we handle within<\/span><a href=\"https:\/\/www.augelegalfiscal.com\/en\/international-property-investment-andorra\/\" target=\"_blank\" rel=\"noopener\"> <span style=\"font-weight: 300;\">foreign real estate investment into Andorra<\/span><\/a><span style=\"font-weight: 300;\">.<\/span><\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_the_agreement_eliminates_double_taxation\"><\/span>How the agreement eliminates double taxation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">Where both States are entitled to tax the same income, the agreement prevents the taxpayer from paying twice through the credit method:<\/p>\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400;\"><strong>In Andorra<\/strong>:<\/span><span style=\"font-weight: 300;\"> the tax paid in the United Kingdom on income sourced there is deducted from the Andorran tax, up to the amount of the Andorran tax corresponding to that income.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\"><strong>In the United Kingdom<\/strong>:<\/span><span style=\"font-weight: 300;\"> the credit method also applies, with <\/span><span style=\"font-weight: 400;\">specific exemptions<\/span><span style=\"font-weight: 300;\"> for dividends received by UK companies and for the profits of permanent establishments located in Andorra, provided the conditions of UK law are met. Where dividends are not exempt and the UK company holds at least 10 % of the voting rights in the Andorran company, the credit also takes into account the underlying tax paid in Andorra.<\/span><\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Anti-abuse_measures_and_dispute_resolution\"><\/span>Anti-abuse measures and dispute resolution<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">The agreement follows the current international standard and includes safeguards against improper use:<\/p>\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400;\"><strong>Anti-abuse clause<\/strong>:<\/span><span style=\"font-weight: 300;\"> the preamble and the rules of the agreement prevent obtaining its benefits through arrangements whose principal purpose is to secure that tax advantage (treaty shopping).<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\"><strong>Mutual agreement procedure (MAP)<\/strong>:<\/span><span style=\"font-weight: 300;\"> allows the authorities of both countries to resolve disputes over interpretation or application by common accord.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\"><strong>Arbitration<\/strong>:<\/span><span style=\"font-weight: 300;\"> if no agreement is reached in the mutual agreement procedure within two years, the matter may be referred to binding arbitration.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\"><strong>Exchange of information<\/strong>:<\/span><span style=\"font-weight: 300;\"> the agreement provides for cooperation between administrations to prevent tax evasion and avoidance.<\/span><\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\">The agreement within Andorra&#8217;s DTA network<\/h2>\n\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 300;\">The agreement with the United Kingdom adds to an ever-wider network of conventions that reinforces the legal certainty of those operating from Andorra abroad. Each convention has its own features: you can, for instance, review the Spain-Andorra double taxation convention or the more recent Andorra-United Arab Emirates convention. And if you want to compare the effective tax burden across jurisdictions, this analysis of taxation in Andorra compared with other European countries is useful.<\/span><\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_agreement_in_the_context_of_the_end_of_the_UK_non-dom_regime\"><\/span>The agreement in the context of the end of the UK non-dom regime<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 300;\">This agreement enters into force at the same time as a far-reaching change in UK taxation: the end of the non-dom regime. For those considering moving their tax residence from the United Kingdom to Andorra, the DTA provides a key piece (legal certainty and no double taxation on income that continues to have a UK source), so that planning can be done with stable, predictable rules.<\/span><\/p>\n\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 300;\">We do not repeat that analysis here; we cover it in detail in our article on<\/span><a href=\"https:\/\/www.augelegalfiscal.com\/en\/uk-non-dom\/\" target=\"_blank\" rel=\"noopener\"> <span style=\"font-weight: 300;\">the end of the UK non-dom regime and Andorra as an alternative<\/span><\/a><span style=\"font-weight: 300;\">. What matters at this point is that the agreement removes one of the main obstacles to such decisions: the risk of being taxed twice on the same income.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>For the first time in their history, the United Kingdom and Andorra have a double taxation agreement (DTA), also referred to as the UK-Andorra Double Taxation Convention. The agreement was signed in London on 20 February 2025 and has been in force since 22 December 2025, taking effect for tax purposes from 2026. For any [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":17824,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[111],"tags":[],"class_list":["post-17828","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-taxation"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/posts\/17828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/comments?post=17828"}],"version-history":[{"count":1,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/posts\/17828\/revisions"}],"predecessor-version":[{"id":17829,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/posts\/17828\/revisions\/17829"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/media\/17824"}],"wp:attachment":[{"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/media?parent=17828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/categories?post=17828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.augelegalfiscal.com\/en\/wp-json\/wp\/v2\/tags?post=17828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}