Andorra and Estonia have agreed to eliminate double taxation, prevent tax evasion, and provide legal certainty for cross-border investments, with withholding taxes capped at 7% for individuals and 5% for royalties.
Andorra has gazetted the ratification of the income and capital tax treaty with Estonia on 13 January 2026.
Signed on 23 September 2025, the agreement seeks to eliminate double taxation on income and capital while preventing tax evasion. It applies to residents of either state and covers corporate, personal, non-resident income taxes in Andorra, and Estonia’s income tax. Key provisions include taxation of income from permanent establishments, real estate, dividends, interest, royalties, capital gains, pensions, and salaries.
Dividends and interest are subject to a maximum withholding tax of 7% for individuals and 0% for others, while royalties are capped at 5%. Gains from alienation of immovable property or shares deriving over 50% from such property may be taxed in the source state.
It will take effect once the ratification instruments are exchanged and will apply from 1 January of the following year.
Earlier, Andorra’s parliament approved the ratification of the income and capital tax treaty with Estonia on 11 December 2025.
