Andorra and Monaco tax treaty – Key points

As of today, Andorra has signed and currently has 13 DTCs (Double Taxation Treaties) in force with France, Spain, Luxembourg, the United Arab Emirates, Portugal, Liechtenstein, Malta, Hungary, Cyprus, Croatia, San Marino, and the latest additions: Monaco and the Czech Republic.

Furthermore, there are prospects to continue with this type of agreements to further its process of international openness. Currently, three additional Double taxation treaties are being negotiated by Andorra: the Netherlands, Iceland, and the United Kingdom. Additionally, discussions are underway with South Korea, Italy, Guatemala, Uruguay, Kazakhstan.

Regarding Monaco, the tax treaty was gazetted on 16 February 2023, ratifying the Andorra – Monaco Income and Capital Tax Treaty (2022)

This landmark agreement, approved by the General Council on January 31, 2023, is set to eliminate double taxation on income and wealth and prevent tax evasion and avoidance between the Principality of Monaco and the Principality of Andorra.

The double taxation treaty between Monaco and Andorra heralds a new era of economic cooperation between the two principalities and set a framework of legal certainty for economic operators of both Andorra and Monaco.

As Monaco and Andorra continue to strengthen their fiscal systems, they are also ensuring a secure and competitive environment for economic growth.

Double Taxation Agreement between the Principality of Andorra and the Principality of Monaco

The Convention on the Avoidance of Double Taxation with respect to taxes on income and the prevention of fiscal evasion between the Principality of Andorra and the Principality of Monaco, ratified in January 2023, serves as an effective tool for reducing tax costs and stimulating economic growth.

This agreement draws heavily from the model tax convention of the Organization for Economic Cooperation and Development (OECD). It establishes agreed standards and harmonizes issues that may arise in the field of international double taxation.

The agreement effectively distributes tax powers between the country of residence and the country of origin of income, thereby eliminating the double taxation of income in the country of residence (Monaco also has corporate income tax).

The double taxation treaty between Andorra and Monaco encompasses several articles divided into chapters that define the treatment of various income types, such as real estate income, business profits, dividends, interest, royalties, capital gains, dependent personal services, remuneration to directors, pensions, students, artists, athletes rents, and public service salaries.

Why is important the tax treaty between Andorra and Monaco?

Tax treaties play a vital role in facilitating international tax cooperation, particularly in the context of determining tax residency and providing individuals with confidence when changing residency.

The tax treaty between Monaco and Andorra provides clear guidelines and mechanisms for tax residency determination in its article 4, ensuring individuals are not subjected to double taxation. By offering enhanced guarantees and certainty, the treaty promotes economic mobility, investment, and the overall prosperity of individuals and businesses in both Monaco and Andorra.

How we can help you?

In pursuit of your residency change from Monaco to Andorra or vice versa, or exploring investment opportunities between Monaco and Andorra, our team of experienced professionals stands ready to assist you in navigating the intricacies of tax treaties and international tax planning.

With our expertise and comprehensive understanding of the legal framework, we can guide you through the process, ensuring a seamless transition and maximizing the benefits of this bilateral tax agreement.

Trust us to be your trusted partner, empowering your aspirations and facilitating your journey towards a prosperous future in the realm of international business, please contact us at [email protected] for further doubts.

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