Andorra Working To Establish Tax Treaty Network
by Ulrika Lomas, Lowtax.net, Brussels
06 June, 2014
Andorra and Luxembourg have signed an agreement on the avoidance of double taxation and fiscal evasion with respect to taxes on income and wealth (DTA), Andorra's Finance Ministry has announced.
The signing of the agreement forms part of the Government's strategy to secure a large network of double tax agreements with key partner states in Europe, to diversify the nation's economy, to attract foreign investors, and to internationalize Andorran businesses, it said.
Andorra's new tax model – with a direct tax on corporate profits, a tax on personal income due to apply from 2015, a 4.5 percent rate of general indirect taxation (IGI), and its new treaty network – ensures legal certainty and an attractive framework for investors, it said.
The agreement with Luxembourg is the second DTA signed by Andorra, and is largely based on the Organization for Economic Cooperation and Development's Model Convention. The accord provides for the exchange of tax information upon request, further improving Andorra's international reputation. Negotiations on the DTA began in November 2011, and the text was initialed on January 14, 2014.
The Principality, which recently signed a similar agreement with France, now intends to expedite DTA negotiations with Spain and Portugal.
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