Cyprus and Andorra signed their first Double Taxation Avoidance Agreement (DTTA) on 18 May 2018, which was published in the Gazette on 1 June 2018.

The treaty is based on the OECD Model Tax Convention framework and will be in force as soon as the remaining legal procedures between the two countries are completed and will take effect as from 1 January of the next calendar year.

Dividends, Interest and Royalties

The DTT provides for a 0% withholding tax rate on dividends, interest and royalties.

Capital gains

Cyprus retains the exclusive taxing rights on disposals of shares made by Cyprus tax residents, except where the shares derive more than 50% of their value, directly or indirectly, from immovable property situated in Andorra. In the case the shares are listed on a EU Stock Exchange, no exception applies if the seller held less than 25% of the capital of the disposed company during the 12 month period prior the disposal.