At the moment of signing the Convention between the Principality of Andorra and the Kingdom of Spain for the avoidance of double taxation with respect to taxes on income and for the prevention of fiscal evasion, the undersigned have agreed upon the following provisions, which shall form an integral part of the Convention:
(I) Entitlement to the benefits of the Convention
- (1) The Contracting States declare that the rules and procedures of their domestic laws regarding the abuse of law (including tax treaties) are applicable to the treatment of such abuse.
- (2) This Convention shall not prevent the Contracting States from applying their domestic rules regarding international fiscal transparency (controlled foreign company (CFC) rules).
- (3) Notwithstanding any other provisions of this Convention, the benefits granted thereunder shall not be granted with respect to an item of income if it can be reasonably considered, taking into account all relevant facts and circumstances, that the agreement or transaction that directly or indirectly generates the entitlement to the benefits has among its main objectives to obtain such benefits, unless it is determined that granting the benefit under such circumstances is consistent with the object and purpose of the Convention.
- (4) It is understood that the benefits of this Convention shall not be granted to any person that is not the beneficial owner of the items of income derived from the other Contracting State.
- (5) Where under this Convention an item of income is taxable only in one of the Contracting States, the other Contracting State may tax the item only if the item of income is not taxed in the first-mentioned Contracting State.
- (6) Where pursuant to the provisions of this Convention an item of income benefits from a tax advantage in a Contracting State and under the domestic law of the other Contracting State a person is taxed on a fraction of such income and not on the total amount, the tax advantage granted by the first State shall not apply to the portion of income that is not subject to tax.
- (7) With respect to the application of the above provisions, the competent authorities of the Contracting States shall consult together for the purpose of applying those provisions, taking into account the particular circumstances of the case.
(II) With reference to Article 4 (Resident)
Persons under the special rules provided by the third transitional provision of the Andorran Law 5/2014 of 24 April 2014, the tax on the income of individuals, are not entitled to the application of this Convention.
(III) With reference to paragraph 4 of Article 6 (Income from immovable property) and paragraph 6 of Article 13 (Capital gains)
No income derived from immovable property shall be attributable to the owners of rights to the enjoyment of such immovable property on the basis of a time-sharing agreement when such enjoyment does not exceed two weeks in a calendar year.
(IV) With reference to Article 10 (Dividends)
The provisions of sub-paragraphs (a) and (b) of paragraph 2 of Article 10 shall not apply to dividends paid by a corporation (Sociedad Anónima) listed on the Real Estate Investment Market (REIT) governed by Spanish Law 11/2009 of 26 October 2009 on corporations listed on the Real Estate Market (REIT) or any later statutes. In such case, if the beneficial owner of the dividends is a resident of Andorra, the tax so charged shall not exceed 15%.
(V) With reference to Articles 10 (Dividends), 11 (Interest), 12 (Royalties)
In order to be entitled to the benefits under Articles 10, 11 and 12, residents of the other Contracting State shall, unless the competent authorities have agreed otherwise, present a certificate of residence indicating the nature and the amount or value of the income issued by the competent authority of the other State.
(VI) Assistance in the collection of taxes
Considering the commitment of the Kingdom of Spain and the Principality of Andorra to improve and facilitate the administrative cooperation in tax matters, the Contracting States undertake to initiate, when the new legal framework of Andorra is fully defined and effectively implemented, negotiations for the signing of an agreement on mutual administrative assistance in the collection tax claims.
(VII) With reference to Article 24 (Exchange of information)
(1) As regards the exchange of information upon request, as provided for in Article 24 of this Convention, the provisions of the Agreement between the Principality of Andorra and the Kingdom of Spain for the exchange of information on tax matters, signed on 14 January 2010, shall apply until 1 January 2016. From that date on, the provisions of that Agreement shall be superseded by the provisions of this Convention.
(2) Requests for information made under the Convention and those pending on 1 January 2016 shall be processed as provided in this Convention, in accordance with the guidelines contained in the following provisions:
- (i) The competent authority of a Contracting State shall provide upon request information for the purposes referred to in Article 24. Such information shall be exchanged without regard to whether the conduct being investigated would constitute a crime under the laws of that Contracting State if such conduct occurred therein.
- (ii) It is understood that the exchange of information can only be requested after all the usual sources of information of the requesting Contracting State that are available under its domestic taxation procedure have been exhausted, without risking adverse impact thereon or giving rise to disproportionate difficulties.
- (iii) If specifically requested by the competent authority of a Contracting State, the competent authority of the other Contracting State shall provide information under Article 24, to the extent allowable under its domestic laws, in the form of depositions of witnesses and authenticated copies of original documents.
- (iv) Each Contracting State shall ensure that its competent authorities for the purposes specified in Article 24 have the authority to obtain and provide upon request information held by banks, other financial institutions and any person acting in an agency or fiduciary capacity, including nominees and trustees.
- (v) It is understood that the taxpayers' rights and safeguards applicable under the domestic laws of the Contracting States should not prevent or unduly frustrate effective exchange of information thwarting the efforts of the requesting State.
- (vi) It is understood that the standard of "foreseeable relevance" is intended to provide for exchange of information in tax matters to the widest possible extent and, at the same time, to clarify that the Contracting States are not at liberty to engage in "fishing expeditions" or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer. Requests for information should be as detailed as possible, including the following information:
- (a) the identity of the person under examination or investigation. This information may include the name or any other sufficient information to enable identification;
- (b) a statement of the information sought including its nature and the form in which the requesting State wishes to receive the information;
- (c) the tax purpose for which the information is sought;
- (d) the reasons why the information requested is foreseeably relevant to the administration and enforcement of the tax laws of the requesting State in regard to the person identified in sub-paragraph (a) of this paragraph;
- (e) grounds for believing that the information requested exists in the other Contracting State or is owned by, or under control of, a person under the jurisdiction of another Contracting State, or can be obtained by such person;
- (f) to the extent possible, the name and address of any person believed to be in possession or having under control the information requested;
- (g) a statement that the request is in conformity with the laws and administrative practices of the State of the competent authority, and that the competent authority is authorised to obtain the information under the laws of that State or in the normal course of administrative practice in similar circumstances, in response to a valid request of a Contracting State under this Convention;
- (h) a statement that the requesting State has pursued all means available in its own territory to obtain the information, except when giving rise to disproportionate difficulties.
- The above requirements contain procedural requirements that must be interpreted with a view not to frustrate effective exchange of information.
- (vii) The competent authority of a Contracting State shall forward the requested information as promptly as possible to the other Contracting State. To ensure a prompt response, the competent authority of the first-mentioned Contracting State shall:
- (a) confirm receipt of a request in writing to the competent authority of the other Contracting State within 10 days of the receipt of the request;
- (b) notify the competent authority of the other Contracting State of deficiencies in the request, if any, within 60 days of the receipt of the request;
- (c) the Contracting States shall put forth their best efforts to obtain and exchange the information required in a period not exceeding six months calculated from the receipt of the request, unless a longer period is required because of the complexity of the requested information or the difficulties in obtaining it. In such cases, the requested State shall inform the requesting State of that situation and of the estimated time to deliver the information. The time restrictions mentioned in this Article do not in any way affect the validity and legality of information exchanged under this Convention;
- (d) it is understood that the information has been exchanged in accordance with the provisions of Article 24 of this Convention even when it is supplied after the deadlines.
- (viii) The rights and safeguards secured to persons in a Contracting State remain applicable in that Contracting State in the course of the process of information exchange.
- (ix) Information provided to a requesting State in accordance with this Convention shall not be disclosed to any foreign authority.
- (x) Notwithstanding the entry into force of the Convention, requests for information may be made in relation to taxable periods for which requests for information may be made under the Agreement between the Principality of Andorra and the Kingdom of Spain for the exchange of information on tax matters, signed on 14 January 2010.
(3) Andorra will be ready to exchange information automatically as soon as it has effectively adopted the common standard of the OECD concerning the automatic exchange of financial information under a bilateral or multilateral agreement for the full implementation of Article 24 of this Convention.
IN WITNESS WHEREOF, the undersigned, duly authorised thereto, have signed this Protocol.
DONE in duplicate at Andorra la Vella on 8 January 2015 in the Catalan and Spanish languages, both texts being equally authentic.
FOR THE KINGDOM OF SPAIN:
CRISTOBAL MONTORO ROMERO,
MINISTER OF FINANCE AND PUBLIC ADMINISTRATION
JORDI CINCA MATEOS,
MINISTER OF FINANCE AND PUBLIC FUNCTION