The Lithuanian government has approved the income and capital tax treaty with Andorra on 11 September 2024.This agreement aims to eliminate double taxation on income and capital, fostering closer cooperation between the tax administrations of both countries to prevent tax avoidance and resolve disputes effectively.
The agreement specifies that dividends and interest are typically subject to a maximum taxation rate of 10%, whereas royalties incur a tax rate of 5%. An exemption is granted for dividends and interest when the beneficial owner is an entity (excluding individuals) that resides in the other contracting state.
Both countries use the credit method to prevent double taxation.
The agreement was signed by Gabrielius Landsbergis, Lithuania’s Foreign Minister, and Imma Tor Faus, Andorra’s Foreign Minister, on 17 April 2024, to strengthen economic ties and promote mutual investment between the two nations.
The treaty is set to take effect once the necessary ratification instruments are exchanged, with its provisions applicable from 1 January of the year following its enactment.
Earlier, Andorra gazetted the income and capital tax treaty with Lithuania on 6 August, 2024.
