Andorra and France sign Tax Treaty


Tax Treaty signed between France and Andorra

The French Parliament earlier this month approved the Double Tax Treaty negotiated with Andorra which will apply from 1st January 2015. The Treaty had been initialled between the two states in 2012, as part of Andorra’s drive towards greater transparency and cooperation with the exchange of information on tax matters on request.

The aim of the treaty is to avoid double taxation and to prevent tax evasion, as well as income tax fraud. The taxes covered, in the case of France, include income and corporation tax and in the case of Andorra, corporation tax, tax on income from activity and tax on income tax on non-residents and tax on capital gains on the transfer of inheritance. The Treaty follows the Model Convention.

The approval of the Treaty had been delayed as a result of it being rejected on two occasions by the French Senate in an unusual disagreement concerning a provision in the Treaty that related to French nationals who are resident in Andorra.

A sub-clause of the Treaty appeared to permit the taxation by France of French nationals resident in Andorra, thus giving rise to taxation of such individuals on the basis of their nationality and not residence. The clause was originally included in the Treaty before the taxation of individuals was introduced in Andorra. The French opposition party requested the government to provide a letter to confirm that it is not its intention to apply ‘taxation by nationality’ to French nationals resident in Andorra.  The government has confirmed it has no intention to introduce a tax based on nationality. If the clause were applied, it would affect an estimated 3,200 French nationals resident in Andorra.

Andorra ratified the Treaty in October 2014.

Andorra has recently signed a Double Tax Treaty with its other immediate neighbour, Spain, in January 2015.

For further information on this subject please contact Simon Huxford at