A double tax treaty was signed between Spain and Andorra on 8 January 2015. The treaty generally follows the provisions of the OECD Model Tax Convention.
Under the treaty the withholding tax rate on dividends is 15% in general and 5% if the beneficial owner is a company (other than a partnership) holding directly at least 10% of the capital of the company paying the dividends. Withholding tax on interest and royalties is 5%. Capital gains derived by a resident of a state from the alienation of shares, participations or comparable interests deriving more than 50% of their value directly or indirectly from immovable property situated in the other state may be taxed in that other state. Capital gains from the alienation of shares representing, directly or indirectly, at least 25% of the capital of a company resident in a contracting state may be taxed in that state.
The tax authorities of both contracting states will consult each other in respect of the application of the above provisions, having regard to the particularities of each case.
