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Andorra and the United Arab Emirates (UAE), two countries that have become attractive destinations for those looking for a new residence, have signed a strategic agreement that will allow both to benefit each other. Andorra, known for its competitiveness in Europe thanks to its low fiscal pressure, and the United Arab Emirates, with a prominent position worldwide, have decided to join forces to advance the digitalization of their public administrations.
In 2017, the governments of Andorra and the United Arab Emirates signed an agreement to avoid double taxation and prevent tax evasion in the area of income taxes. This agreement, aligned with the OECD model, is part of a broader reform of Andorra's economic and fiscal model, designed to strengthen its competitiveness in the face of future challenges.
The bilateral agreement distributes fiscal powers between both countries and establishes clear rules to avoid double taxation. In addition, it includes specific provisions on hydrocarbons and other incomes, and provides an exemption for income generated by financial institutions wholly owned by a contracting State.
The objective of both governments is to promote economic relations and improve mutual cooperation. Among the main agreed provisions are:
- Definition of Residents
- Regulation of Permanent Establishments
- Business Benefits Treatment
- Rules for Partner Companies
- Dividend and Interest Taxation
- Capital Gains Taxes
- Work Income and Other Income
- Information Exchange Procedures
The recent agreement for the digitalization of public administration is part of this growing cooperation between the two countries. Andorra, despite being one of the most competitive countries in Europe, recognizes the need to perfect its bureaucratic system, which has some deficiencies.
To address these areas of improvement, Andorra has decided to partner again with the United Arab Emirates, which stand out for their significant technological advances in modernization, digitalization and automation. This new agreement will allow Andorra to adopt an administrative model similar to that of the UAE, thus consolidating its competitive position in the medium-long term.
The relationship between Andorra and the United Arab Emirates is getting stronger, with the signing of this second agreement, which underlines their commitment to collaboration and joint development in key areas such as administrative digitalization.
