Andorra and Romania have signed an income and capital tax treaty, setting clear rules on corporate and personal taxes, with reduced withholding rates on dividends, interest, and royalties.
The income and capital tax treaty between Andorra and Romania, signed on 27 September 2024, officially entered into force on 11 December 2025.
The treaty addresses a range of taxes, including Andorran corporate and personal income taxes, taxes on non-resident income, Romanian income tax, and profit tax.
Under the agreement, withholding tax rates have been set to encourage cross-border investment: dividends are exempt from withholding tax if the recipient company holds at least 10% of the payer’s capital for a continuous period of 365 days; otherwise, a 5% rate applies. Interest payments are subject to a 3% withholding tax, while royalties are subject to a 5% withholding tax.
The provisions of the treaty will take effect from 1 January 2026.
Earlier, on 29 October 2025, Romania’s President signed a decree enacting Law No. 170/2025, formally ratifying the country’s income and capital tax treaty with Andorra.
