A CDI is an agreement to determine which country is responsible for claiming an income tax and avoiding that can be claimed by other countries under the fiscal overlapping sovereignties of the countries involved. In this way it prevents a taxpayer is taxed on the same income twice.
Andorra has signed double taxation agreements with many of its neighbors and one of the most important is signed in February 2016 with Spain.
In the new Andorra, modern and open, the CDI is excellent news because it allows domestic firms who are operating abroad to benefit from greater transparency and ease.
The first clear effect is the disappearance of retentions by the Spanish state to Andorran companies, as well as no need to make corrections in andorra for taxes paid in Spain. This enables Andorran companies to operate more efficiently in Spain and with greater certainty.
The second important point is the standardization of procedures for Andorra this new framework, because Andorra should try that their rules increasingly resembles the ones of its European neighbors.
All this means that, from pensioners, through employers or employees, the possibility of living in the country becomes more attractive, since deductions, administrative problems and suspicions will become issues of the past. Reside in the country will be simpler from an administrative and fiscal perspective.
The CDI is a step in the interconnection of Andorra with its neighbors, a new status quo where Andorra wants to play the card of being a modern, international and compete with much larger states in matters country as international trade, exploitation of patents and trademarks.