The income tax treaty between Andorra and Lithuania entered into force on 24 December 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.
It 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.
Earlier, Lithuania published Law No. XIV-3099 of 11 May 2023 in the Official Gazette on 20 November 2024 which pertained to the ratification of the income and capital tax treaty with Andorra.
Lithuania’s parliament (Seimas) approved the ratification of the tax treaty on income and capital with Andorra on 12 November 2024.The government approved the income and capital tax treaty with Andorra on 11 September 2024.
Andorra gazetted the income and capital tax treaty with Lithuania on 6 August 2024.
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.
