On 30 November 2016, the general council of Andorra approved the income tax treaty with Portugal for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
Furthermore, the withholding tax on dividend income shall not exceed 5 per cent of the gross amount of the dividends if the beneficial owner is a company that has held directly, for the period of 12 months ending on the date on which entitlement to the dividends is determined, at least 10 per cent of the capital of the company paying the dividends and 15 per cent shall apply in all other cases.
For interest income maximum 10 per cent and for royalty income maximum 5 per cent withholding tax applies in which it arises.
According to this agreement, interest arising in a Contracting State shall be taxable only in the other Contracting State if the interest is paid by or beneficially owned by a Contracting State, a political or administrative subdivision or local authority thereof, the central bank of a Contracting State or any agency or instrumentality wholly owned by any of the foregoing.
