Latvia and Andorra’s agreement to eliminate double taxation and prevent tax evasion came into effect on 16 June 2025.
Andorra announced in the Official Gazette that the income and capital tax treaty between Andorra and Latvia entered into force on 16 June 2025.
Signed on 21 September 2024, this is the first tax treaty between the two nations, aiming to prevent double taxation on income and curb tax evasion or avoidance in cross-border transactions involving taxpayers from Andorra and Latvia.
The treaty covers Andorra’s corporate income tax, personal income tax, and tax on non-residents’ income, as well as Latvia’s enterprise income tax, personal income tax, and immovable property tax. To prevent double taxation, both nations will apply the credit method.
Withholding tax rates are as follows: Dividends are taxed at 0% if the beneficial owner is a company; otherwise, the rate is 10%. Interest payments are also taxed at 0% when paid by a company to another company that is the beneficial owner; otherwise, the rate is 10%. Royalties are subject to a flat withholding tax rate of 5%.
The treaty will take effect starting 1 January 2026.
Earlier, Andorra ratified the income tax treaty with Latvia on 18 February 2025, while Latvia approved the ratification of the tax treaty with Andorra on 12 December 2024.
