{"id":4603,"date":"2021-04-19T15:17:35","date_gmt":"2021-04-19T15:17:35","guid":{"rendered":"https:\/\/ancei.com\/tax-withholding-and-double-taxation-agreements\/"},"modified":"2024-10-23T09:33:53","modified_gmt":"2024-10-23T09:33:53","slug":"tax-withholding-and-double-taxation-agreements","status":"publish","type":"page","link":"https:\/\/ancei.com\/en\/tax-withholding-and-double-taxation-agreements\/","title":{"rendered":"Tax withholding and double taxation agreements"},"content":{"rendered":"

[et_pb_section fb_built=”1″ custom_padding_last_edited=”on|phone” _builder_version=”4.16″ background_color=”#333333″ background_enable_image=”off” custom_padding=”60px||60px||true|” custom_padding_tablet=”” custom_padding_phone=”30px||30px||true|false” global_colors_info=”{}”][et_pb_row _builder_version=”4.16″ custom_padding=”30px||20px||false|false” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ global_colors_info=”{}”][et_pb_text content_phone=”<\/p>\n

TAX OBLIGATIONS FOR RESIDENTS AND NON-RESIDENTS<\/span><\/h1>\n

” content_last_edited=”off|desktop” admin_label=”Title” _builder_version=”4.16″ text_font=”||||||||” header_font=”Raleway|900|||||||” header_font_size=”60px” header_line_height=”1.5em” header_2_font=”Raleway|900|||||||” header_2_text_align=”center” header_2_font_size=”40px” header_2_letter_spacing=”2px” header_2_line_height=”1.25em” module_alignment=”center” custom_margin=”||||false|false” custom_padding=”|||” animation_style=”fade” header_font_size_tablet=”” header_font_size_phone=”30px” header_font_size_last_edited=”on|phone” header_2_font_size_tablet=”40px” header_2_font_size_phone=”” header_2_font_size_last_edited=”on|tablet” global_colors_info=”{}”]<\/p>\n

FISCAL RETENTIONS AND DOUBLE TAXATION TREATIES\u00a0\u00a0<\/span><\/h1>\n

[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ admin_label=”Service Section” _builder_version=”4.16″ background_color=”#ffffff” background_enable_image=”off” background_position=”top_right” custom_padding=”60px||60px||true|” global_colors_info=”{}”][et_pb_row admin_label=”Service Area” _builder_version=”4.16″ custom_padding=”0px||30px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.16″ text_font=”Lato||||||||” text_font_size=”20px” text_line_height=”2em” header_2_font=”Raleway|900|||||||” header_2_text_align=”center” header_2_text_color=”#b01f58″ header_2_font_size=”40px” header_2_line_height=”1.5em” header_3_font=”Raleway|900|||||||” header_3_text_align=”center” header_3_text_color=”#b01f58″ header_3_font_size=”28px” header_3_line_height=”1.5em” text_orientation=”justified” custom_margin=”||30px||false|false” text_font_size_tablet=”” text_font_size_phone=”18px” text_font_size_last_edited=”on|phone” header_3_font_size_phone=”20px” header_3_font_size_last_edited=”off|desktop” text_orientation_tablet=”” text_orientation_phone=”left” text_orientation_last_edited=”on|desktop” global_colors_info=”{}”]Aspects such as the internationalization of business or the rise of telework and the mobility of natural persons increase the importance of taxation linked to international relations in the business world. Domestic regulations of different countries usually regulate a series of\u00a0withholding measures to be applied, at the source, on income earned in their territory. For\u00a0example, it is common for countries to apply retentions when paying dividends, interest and\u00a0royalties, among other rents, or simply invoices to non-residents. This may complicate\u00a0economic relations with certain countries. It is precisely in order to promote investment\u00a0momentum and, at the same time, facilitate economic relations between countries that\u00a0bilateral agreements<\/strong> exist to allow for better fiscal treatment. These bilateral agreements\u00a0are the so-called “double taxation avoidance agreements”.[\/et_pb_text][et_pb_divider divider_position=”center” divider_weight=”3px” _builder_version=”4.16″ max_width=”70px” module_alignment=”center” custom_margin=”||30px|||” animation_direction=”top” locked=”off” global_colors_info=”{}”][\/et_pb_divider][et_pb_text _builder_version=”4.16″ text_font=”Lato||||||||” text_font_size=”20px” text_line_height=”2em” header_2_font=”Raleway|900|||||||” header_2_text_align=”center” header_2_text_color=”#b01f58″ header_2_font_size=”40px” header_2_line_height=”1.5em” text_orientation=”justified” custom_margin=”||||false|false” text_font_size_tablet=”” text_font_size_phone=”18px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”” header_2_font_size_phone=”30px” header_2_font_size_last_edited=”on|phone” text_orientation_tablet=”” text_orientation_phone=”left” text_orientation_last_edited=”on|desktop” global_colors_info=”{}”]<\/p>\n

WHAT ARE THE DOUBLE TAXATION TREATIES AND WHAT ARE THEY FOR?<\/h2>\n

Agreements to avoid double taxation are bilateral, inter-country agreements that allow companies to obtain better fiscal conditions in their international relations. These mainly prevent companies from having to pay twice for the same concept (double taxation). And, in addition, they deal with issues such as rules for determining tax residency, means of communication between tax administrations, and so on.<\/p>\n

For example, if an Andorran company has a subsidiary abroad, it may be that, when the latter wants to distribute dividends to its parent company, it finds a retention that charges the dividend to be paid. Such retention could be reduced or even eliminated by a convention to avoid double taxation (ILC).[\/et_pb_text][et_pb_toggle title=”How many treaties to prevent double taxation has Andorra signed?” open_toggle_background_color=”#f4f4f4″ closed_toggle_background_color=”#f4f4f4″ _builder_version=”4.16″ title_font=”Lato|700|||||||” title_font_size=”18px” title_line_height=”2em” closed_title_font=”Lato|700|||||||” closed_title_font_size=”18px” closed_title_line_height=”2em” body_font=”Lato||||||||” body_text_align=”justify” body_font_size=”18px” body_line_height=”2em” custom_margin=”||0px||false|false” title_font_size_tablet=”” title_font_size_phone=”16px” title_font_size_last_edited=”on|phone” closed_title_font_size_tablet=”” closed_title_font_size_phone=”16px” closed_title_font_size_last_edited=”on|phone” body_text_align_tablet=”” body_text_align_phone=”left” body_text_align_last_edited=”on|phone” body_font_size_tablet=”” body_font_size_phone=”16px” body_font_size_last_edited=”on|phone” border_width_all=”0px” global_colors_info=”{}”]<\/p>\n

Andorra has signed twenty agreements to avoid double taxation and is currently in advanced negotiations with other countries at the international level.<\/p>\n

The agreements in force are: France, Luxembourg, Spain, United Arab Emirates, Portugal, Liechtenstein, Malta, Cyprus, San Marino, Hungary, Croatia, Czech Republic, Monaco, Iceland, Netherlands, South Korea, Lithuania, Latvia, Montenegro, Romania.<\/p>\n

[\/et_pb_toggle][\/et_pb_column][\/et_pb_row][et_pb_row admin_label=”Service Area” _builder_version=”4.16″ custom_padding=”0px||0px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.16″ text_font=”Lato||||||||” text_font_size=”20px” text_line_height=”2em” header_2_font=”Raleway|900|||||||” header_2_text_align=”center” header_2_text_color=”#b01f58″ header_2_font_size=”40px” header_2_line_height=”1.5em” header_3_font=”Raleway|900|||||||” header_3_text_align=”center” header_3_text_color=”#b01f58″ header_3_font_size=”28px” header_3_line_height=”1.5em” text_orientation=”justified” custom_margin=”||0px||false|false” text_font_size_tablet=”” text_font_size_phone=”18px” text_font_size_last_edited=”on|phone” header_3_font_size_phone=”20px” header_3_font_size_last_edited=”off|desktop” text_orientation_tablet=”” text_orientation_phone=”left” text_orientation_last_edited=”on|desktop” global_colors_info=”{}”]These bilateral agreements, in addition to providing legal certainty<\/strong>, simply by leaving the rules of the game defined and allowing to calculate the exact tax impact of the transactions carried out, represent a significant savings in taxes<\/strong>, by avoiding the duplication of tax bills; This favors the internationalization of companies, since the agreements allow for the expansion of Geographical markets without making such operations subject to a tax penalty that may reduce the competitiveness of companies.<\/p>\n

For example, when an Andorran company wants to provide services to a Spanish company under the agreement to avoid double taxation, the Spanish state does not apply any retention, in its origin, when paying that invoice. Similarly, if an Andorran company has a Spanish subsidiary, when the subsidiary wants to distribute dividends to its Andorran parent, it must hold 5% (if the share exceeds 10%), rather than 19%, which is the percentage established by Spanish regulations for residents.<\/p>\n

 [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ fullwidth=”on” _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][et_pb_fullwidth_image src=”https:\/\/ancei.com\/wp-content\/uploads\/2021\/03\/Montan\u0303a-Andorra-ANCEI.png” title_text=”Andorran Mountain | ANCEI” _builder_version=”4.16″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_fullwidth_image][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.16″ background_color=”#f4f4f4″ background_enable_image=”off” background_position=”top_center” custom_padding=”60px||60px||true|” global_colors_info=”{}”][et_pb_row admin_label=”Service Area” _builder_version=”4.16″ custom_padding=”0px||30px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text content_phone=”<\/p>\n

WE CALCULATE HOW MUCH YOU WOULD SAVE BY CHANGING YOUR TAX RESIDENCY TO ANDORRA<\/h2>\n

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MORE ON THE DOUBLE TAXATION TREATIES<\/h2>\n

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