UK–Andorra Double Taxation Agreement

In December 2025, the United Kingdom formally brought into effect a new tax agreement with Andorra aimed at eliminating double taxation on income and capital gains. The Double Taxation Relief and International Tax Enforcement (Andorra) Order 2025, registered as SI 2025/1301, was made on 10 December and gives domestic legal effect to a bilateral Convention between the UK and the Principality of Andorra.

The Convention is designed to allocate taxing rights between the two jurisdictions, prevent tax evasion and avoidance, and strengthen cooperation in international tax enforcement.

Corrections and legal clarity

A notable feature of the Order is the inclusion of agreed corrections to the original text of the Convention. The Schedule incorporates diplomatic notes exchanged in June 2025, through which both governments agreed technical amendments to the treaty wording. These notes form an integral part of the agreement and ensure that the Convention enters into force in its corrected and mutually accepted form.

This approach enhances legal certainty and reduces the risk of interpretative disputes once the treaty is applied in practice.

Eliminating double taxation in practice

The Arrangements seek to prevent the same income or capital gains from being taxed in both countries. This is achieved by clearly allocating taxing rights in accordance with domestic law and by providing mechanisms for relief from double taxation, such as exemptions or tax credits.

The Convention also includes provisions to prevent discriminatory tax treatment and to facilitate administrative cooperation and information exchange between the tax authorities of the UK and Andorra.

Entry into force and application

The treaty will enter into force on the date when both countries notify each other that their respective domestic procedures have been completed. Its practical application will follow the rules set out in Article 28 of the Convention, determining how and when its provisions apply in each jurisdiction.

The official date of entry into force will be published in due course in the London, Edinburgh and Belfast Gazettes.

Implications for taxpayers and investors

For individuals and businesses with cross-border income or assets linked to the UK and Andorra, the agreement provides greater certainty and reduces the risk of double taxation. At the same time, it reinforces expectations around transparency and compliance in cross-border tax planning.

As reported by International Investment experts, the UK–Andorra tax treaty reflects a broader move towards coordinated international taxation and enhanced enforcement. For investors, it offers clearer rules but also underscores the importance of robust tax structuring and compliance in an increasingly interconnected regulatory environment.