South Korea’s Ministry of Foreign Affairs has announced that the income tax treaty with Andorra has entered into force on 1 April 2025.
The withholding tax rate on dividends is 5% if the owner is a company that has held at least 10% of the payer’s capital for 365 days, including the payment date; otherwise, it is 10%. Interest and royalties are also taxed at 5%.
Signed on 3 November 2023, it is the first treaty between the two nations. The tax treaty aims to eliminate double taxation on income and curb tax evasion or avoidance in cross-border transactions involving taxpayers from South Korea and Andorra.
Once in effect, the treaty is expected to foster more significant economic exchanges and catalyse international tax cooperation between South Korea and Andorra.
The treaty goes into effect on 1 January 2026.
