The France-Andorra tax treaty: key articles

The Franco-Andorran tax treaty, dated April 2, 2013, concerns income taxes, including corporate income. It caps withholding tax at 5% or 15% for dividends, 5% for interest, and 5% for royalties. It does not include provisions regarding inheritance. A protocol defines Andorran residency. According to the 2015 Senate report, the nationality clause in Article 25 deviates from French law and other tax treaties.

A 2013 text, in force since 2015, for income taxes only

The convention was signed in Paris on April 2, 2013, with a protocol forming an integral part thereof. It was approved by the law of March 13, 2015, and published by the decree of July 17, 2015. It entered into force on July 1, 2015. For withholding taxes, it applies to amounts taxable from January 1, 2016; for other income taxes, to calendar years or fiscal years beginning on or after the same date (Article 28).

The multilateral convention (MLI) modifies it. For France, its effects begin on January 1, 2022, for taxes withheld at source and on July 1, 2022, for other taxes. For Andorra, the note to the consolidated version indicates January 1, 2023, for other taxes.

The administrative list of conventions (BOI-ANNX-000306, dated April 29, 2026) classifies Andorra solely in the "IR" column: no inheritance or gift conventions. The consolidated text also contains no articles on wealth or inheritance. The information exchange agreement of September 22, 2009, supplements the convention (Article 24).

Maximum deductions and key rules

Who is a resident: the 183-day protocol

Article 4 defines a resident as a person liable to tax in a State by reason of their domicile, residence, place of management, or a similar criterion. For an individual resident in both States, the determination follows this order: permanent home, center of vital interests, habitual residence, nationality, and then mutual agreement of the authorities.

The protocol clarifies the definition for Andorra. An Andorran resident is someone who stays in Andorra for more than 183 days in a calendar year, or whose center of economic interests or principal professional activity is in Andorra. The protocol excludes the presumption of residence based solely on Andorran nationality or a residence permit. The 2015 report of the National Assembly presents this clause as transitional; we draw no conclusions regarding its current status.

Dividends: 5 % starting from 10 % of capital, 15 % otherwise

Article 10 leaves taxation to the beneficiary's state of residence and authorizes a capped levy in the state of the paying company. The 5% tax rate requires that the beneficial owner be a company, excluding partnerships, directly holding at least 10% of the capital. The text does not specify a minimum holding period. For an individual, the cap is 15%. Article 10 also stipulates that no tax is levied on undistributed profits.

To obtain these rates, article 27 provides in principle for a certificate of residence certified by the tax administration, for articles 10 to 12.

Interest and royalties: 5 %

Interest is taxable in the state of residence; the state of source may levy up to 5 % of the gross amount. Article 11 provides for cases where interest is taxable only in the state of residence of the beneficiary: interest paid to a state or a public legal entity, including the central bank; interest on claims "guaranteed or insured" by a state; interest on credit sales between businesses; and interest paid by a financial institution of one state to a financial institution of another state. The text of these four cases should be read before any application. Royalties are capped at 5 %. Copyright royalties, excluding software, films, and recordings, are taxable only in the state of residence of the beneficial owner.

Capital gains: the five paragraphs of Article 13

The first paragraph covers buildings and shares in companies whose assets consist primarily of real estate; the other four cover other assets, hence the six rules below.

1. Capital gains from real estate are taxable in the state where the real estate is located.
2. Capital gains on shares or units of a corporation, more than 50% of whose value is derived from real estate located in a state, are taxable in that state, excluding real estate used in the corporation's own business. The 50% threshold is assessed at any time during the 365 days preceding the sale.
3. Gains on movable property of a permanent establishment are taxable in the State of that establishment.
4. Gains from aircraft operated in international traffic are taxable only in the state where the company's effective management is located.
5. Gains on a substantial interest, i.e. rights to 25 % or more of the company's profits, are taxable in the state of residence of the company.
6. Other gains are taxable only in the state of residence of the transferor.

Salaries, pensions, attendance fees

Subject to Articles 15, 17, and 18, salaries are taxable in the State of residence, unless the employment is exercised in the other State. Article 14 provides an exception for stays not exceeding 183 days in any twelve-month period, subject to two other conditions: the employer must not be a resident of the other State, and the expense must not be borne by a permanent establishment. The full text of the article should be read before any calculations. Liberal professions fall under Article 7 (business profits).

Private pensions are taxable only in the recipient's state of residence (Article 17). Public remuneration follows Article 18: in principle, the paying state, with an exception for recipients who reside in the other state but hold only its nationality. Directors' fees are taxable in the company's state of residence (Article 15).

Avoiding double taxation: tax credit in France, deduction in Andorra

According to Article 21 § 1 a), France applies the tax credit method. The amount depends on the income: for income from i) (real estate, salaries, pensions, public service, other income), the credit is equal to the corresponding French tax; for income from ii) (dividends, interest, royalties, profits, certain gains), it is equal to the Andorran tax paid, up to the limit of the corresponding French tax. The National Assembly report also mentions an exemption for certain corporate income. Andorra deducts from its tax an amount equal to the income tax paid in France, up to the limit of the portion of Andorran tax, calculated before deduction, that corresponds to the income taxable in France (Article 21 § 2 a)).

Article 25: Anti-abuse clause and nationality clause

Paragraph 1(a) denies a benefit under the convention if one of the principal purposes of an arrangement was to obtain it, unless the granting would be consistent with the purpose of the convention. Paragraph 1(b) applies to a recipient who is not the beneficial owner.

Paragraph 1(d) concerns the nationality clause: France may tax French nationals residing in Andorra as if the convention did not exist, but only when French tax law permits the application of this provision; the competent authorities of both states then agree on its implementation. The 2015 Senate report describes it as a derogation from domestic law and other conventions, and reports that the Government considers the mention of possible taxation of French nationals residing in Andorra to be "without legal effect." We are not ruling on the application of this clause: it must be verified against the text and current legal doctrine before any decision is made.

Amicable procedure, duration, exchange of information

A taxpayer must notify the competent authority within three years of the first notification of the measure (Article 23). The convention is of unlimited duration; each State may denounce it through diplomatic channels with at least six months' notice before the end of a calendar year (Article 29).

10 % threshold on dividends: numerical example (fictitious profile)

Situation. A French company, fictitious profile, receives €200,000 in gross dividends from an Andorran company.

Issue. She directly owns 10 % of the capital. Her neighboring partner owns 9 % and wonders what difference one point of capital makes.

Strategy. It compares the two ceilings of article 10: 5 % from 10 % of capital held directly, 15 % in other cases.

Result. At 10 %, the ceiling is 5 %: €10,000. At 9 %, it is 15 %: €30,000. The difference is €20,000. These amounts are withholding ceilings; the actual rate applied in Andorra is not addressed here, and the residency certificate required under Article 27 still needs to be obtained.

What this page does not cover

Articles 5, 6, 8, 9, 16, 19, 20, 22, and 26, paragraph 1(c) and paragraph 2 of Article 25, the IFI (Wealth Tax), the administration's article-by-article commentary, and the current application of the nationality clause are not detailed. Andorra's internal regulations are addressed on our page about living in Andorra.

What changes depending on your situation

• Your residence as defined in Article 4 and the Protocol.
• The nature of the income: dividend, interest, royalty, capital gain, salary, pension.
• Your nationality, for the clause in article 25.
• The percentage of capital held and its direct nature.
• Proof of residence to be provided.

An article should be read in light of the facts in your case. No outcome is guaranteed.