The Andorra-Montenegro tax treaty introduces new rules on income, capital gains, and withholding taxes, with effect from 1 January 2026.
The income and capital tax treaty between Andorra and Montenegro entered into force on 1 July 2025, following its publication in Andorra’s Official Gazette.
Signed on 24 September 2024, this is the first such agreement between the two countries.
This announcement was made by the Government of Andorra on 25 June 2025.
The treaty covers corporate and personal income taxes, as well as real estate and non-resident income taxes. It sets withholding tax rates at 5% for dividends (reduced from 10% for qualifying companies) and 5% for interest and royalties, with certain exemptions for government-related entities.
Capital gains on immovable property, business assets, and shares deriving over 50% of their value from immovable property may be taxed in the source country. Other capital gains are taxable only in the country of residence.
Both countries apply the credit method to eliminate double taxation. Anti-abuse rules apply to prevent treaty shopping. The treaty’s provisions take effect from 1 January 2026.
