Cyprus - Andorra Double Tax Treaty

The double tax treaty with Andorra which was signed on 18 May 2018 will come into effect on 1st January 2020.

The main provisions of the treaty are as follows: -

• Dividends, interest and royalties - no withholding tax will be levied on dividend interest or royalty payments.
• Capital gains – Cyprus retains the exclusive taxing rights on disposal of shares made by Cyprus tax residents, with some exceptions.
• Principal purpose test (PPT) – the treaty incorporates the BEPS project action 6 which provides that a benefit under the treaty shall not be granted if obtaining that benefit was one of the principal purposes of the arrangement or the transaction taking place.