Andorra Cross-Border Tax Guide: WHT 0%/10%/5%, DTTs, Transfer Pricing 2026

Q: Can I repatriate profits from Andorra tax-free?

Dividends to non-residents: 0% WHT (no withholding). Interest: 10% WHT (treaty-reducible). Royalties: 5% WHT (treaty-reducible). No branch remittance tax.

Q: What is the procedure for claiming DTT benefits?

Provide the payer with a Treaty Relief Application, Certificate of Tax Residency, and beneficial ownership declaration. Apply treaty rate at source or claim a refund if over-withheld.

Andorra's cross-border tax framework features zero withholding tax on dividends for both residents and non-residents, 10% on interest, 5% on royalties, a growing network of DTTs, and transfer pricing rules aligned with OECD guidelines. Here is how cross-border taxation works in 2026.

Cross-border taxation in Andorra is governed by domestic tax law and Andorra's Double Taxation Treaties. The territorial system means Andorra generally taxes only Andorran-source income. Withholding tax rates are very competitive: 0% on dividends is particularly attractive for international holding structures. Transfer pricing rules ensure transactions between related parties are at arm's length. The Departament de Tributs i Fronteres handles cross-border matters. Investment income tax →

Real-world example: A Spanish company receives €100,000 in dividends from its Andorran subsidiary. WHT at 0% = €0 (Andorra levies no dividend withholding tax for non-residents). An Italian company licensing software to an Andorran company receives €50,000 in royalties: domestic WHT 5% = €2,500, but under the Andorra-Italy DTT, the rate may be reduced further. A UK lender receives €20,000 in interest from an Andorran borrower: WHT 10% = €2,000, potentially reduced under DTT. Corporate tax overview →

Withholding Tax Rates

Dividends to non-residents: 0% — no withholding tax on dividends paid to non-residents (participation exemption)
Dividends to residents: 0% — no withholding tax on dividends paid to Andorran residents
Interest to non-residents: 10% (may be reduced under DTT)
Interest to residents: 0%
Royalties to non-residents: 5% (may be reduced under DTT)
Royalties to residents: 5%

The 0% dividend WHT is a key advantage for Andorra as a holding jurisdiction. Interest and royalty rates are also competitive compared to Spain (19-21%), France (up to 30%), and Portugal (25-35%).

Double Taxation Treaties

Andorra has approximately 10 DTTs. Treaties generally provide for:

Dividends: 0% in most treaties (reflecting domestic 0% rate)
Interest: Reduced rates typically 0-5% (compared to 10% domestic)
Royalties: Reduced rates typically 0-5% (compared to 5% domestic)
Business profits: Only taxable in the source country if there is a permanent establishment
Capital gains: Generally taxable in the country of residence of the seller
Employment income: Taxable in the work country (subject to the 183-day exemption)

Key treaty partners: Spain, France, Portugal, Luxembourg, UAE, Malta, Cyprus, San Marino, Hungary, Netherlands. Andorra is actively expanding its treaty network.

Transfer Pricing

Andorra's transfer pricing rules follow the OECD Transfer Pricing Guidelines. Key requirements include:

Arm's length principle: Transactions between related parties must be conducted as if between independent entities
Documentation: Taxpayers must maintain transfer pricing documentation including master file, local file, and country-by-country reporting for groups exceeding relevant thresholds
Methods: Acceptable methods include comparable uncontrolled price (CUP), cost plus, resale price, transactional net margin method (TNMM), and profit split
Penalties: Adjustments and penalties apply for non-compliance

Permanent Establishment Risk

Non-resident companies may create a taxable presence (permanent establishment) in Andorra through a fixed place of business (office, branch, workshop, construction site exceeding a certain duration) or a dependent agent with authority to conclude contracts. A PE is subject to CIT at 10% on profits attributable to the PE.

Can I repatriate profits from Andorra tax-free?

Dividends paid to non-resident shareholders attract 0% WHT. Interest and royalties paid to non-residents attract 10% and 5% respectively (subject to treaty reduction). There is no additional branch remittance tax on profits remitted by a PE to its foreign head office.

What is the procedure for claiming DTT benefits?

The non-resident must provide the Andorran payer with a completed Treaty Relief Application, a Certificate of Tax Residency from the home country tax authority, and a declaration of beneficial ownership. The payer then applies the treaty rate at source. Alternatively, tax can be withheld at the domestic rate and the non-resident can file a refund claim.