Date: 2025-10-17Category: Not ApplicableState: Union GovernmentCountry: Europe
Council Decision (EU) 2025/2120 of 10 October 2025 on the signing, on behalf of the Union, of the Amending Protocol to the Agreement between the European Union and the Principality of Andorra on the automatic exchange of financial account information to improve international tax compliance
**Executive Summary**
Council Decision (EU) 2025/2120, dated October 10, 2025, authorizes the signing, on behalf of the European Union, of the Amending Protocol to the Agreement between the EU and the Principality of Andorra on the automatic exchange of financial account information to improve international tax compliance. This decision enters into force on the date of its adoption.
**Key Points / Main Content**
* **Background and Purpose:**
* The Agreement between the EU and Andorra on automatic exchange of financial account information has enhanced mutual assistance and improved international tax compliance.
* The Amending Protocol reflects changes to the Common Reporting Standard (CRS) approved at the international level on August 26, 2022 and incorporated into Union law by Council Directive (EU) 2023/2226.
* **Amending Protocol Details:**
* The Amending Protocol expands the reporting scope to include new digital financial products (e.g., Specified Electronic Money Products, Central Bank Digital Currencies).
* It also introduces more detailed reporting requirements and strengthens due diligence procedures.
* It updates references to the data protection legislation of the Contracting Parties.
* **Authorization and Approval:**
* The signing of the Amending Protocol is authorized on behalf of the Union, subject to its conclusion.
* Joint Declarations of the Contracting Parties related to the Amending Protocol, the Agreement, and Article 5 of the Agreement are approved on behalf of the Union.
**Impact Analysis**
**European Union**
*Impact:* The EU commits to signing the Amending Protocol, aiming to improve international tax compliance and extend reporting standards to digital financial products.
*Action Required:* Authorize the signing of the Amending Protocol.
**Principality of Andorra**
*Impact:* Andorra needs to adapt its financial reporting framework to align with the updated Common Reporting Standard and comply with strengthened due diligence procedures.
*Action Required:* Update its financial regulations to implement the new reporting requirements for digital financial products and other changes stipulated in the Amending Protocol.
**Financial Institutions in the EU and Andorra**
*Impact:* Financial institutions will need to implement the updated CRS reporting requirements, including reporting on new digital financial products, adopting stricter due diligence procedures, and adhering to updated data protection references.
*Action Required:* Adjust reporting systems and due diligence procedures to comply with the Amending Protocol's requirements.
**Tax Authorities**
*Impact:* Tax authorities gain access to expanded financial account information, enhancing their ability to combat tax evasion and improve tax compliance.
*Action Required:* Adapt internal systems and procedures to effectively manage and analyze the expanded data received under the updated reporting standards.
Key Entities Referenced
Amending Protocol to the Agreement between the European Union and the Principality of Andorra: Amends the existing agreement between the EU and Andorra regarding automatic exchange of financial account information to improve international tax compliance. Expands reporting scope to include digital financial products and updates data protection references.
Principality of Andorra: One of the parties to the agreement, impacted by regulations concerning data protection and exchange of financial account information.
European Union: One of the parties to the agreement, focused on tax compliance and personal data transfer with Andorra.
Common Reporting Standard (CRS): A standard of the OECD being updated. Changes to which were incorporated into Union law and subsequently led to the need to renegotiate the agreement with Andorra.
Council Directive 2011/16/EU: Council Directive amended by Directive (EU) 2023/2226 regarding administrative cooperation in the field of taxation, forming the context for the agreement.
Official Journal EN
of the European Union L series
2025/2120 17.10.2025
COUNCIL DECISION (EU) 2025/2120
of 10 October 2025
on the signing, on behalf of the Union, of the Amending Protocol to the Agreement between the
European Union and the Principality of Andorra on the automatic exchange of financial account
information to improve international tax compliance
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 115, in conjunction with
Article 218(5) and Article 218(8), second subparagraph, thereof,
Having regard to the proposal from the European Commission,
Whereas:
(1) The Agreement between the European Union and the Principality of Andorra on the automatic exchange of financial
account information to improve international tax compliance(1)(‘the Agreement’) has enhanced mutual assistance in
tax matters between the Contracting Parties and improved international tax compliance.
(2) Important changes to the Common Reporting Standard (CRS) of the Organisation for Economic Cooperation and
Development were approved at international level on 26 August 2022 and were incorporated into Union law by
means of Council Directive (EU) 2023/2226(2), which amended Council Directive 2011/16/EU(3).
(3) On 21 May 2024, the Council authorised the Commission to open negotiations with the Principality of Andorra
(‘Andorra’) for an amendment of the Agreement to reflect the changes to the CRS approved at the international level.
The negotiations were successfully concluded with the initialling of the Amending Protocol to the Agreement
between the European Union and the Principality of Andorra on the automatic exchange of financial account
information to improve international tax compliance (‘the Amending Protocol’).
(4) The Amending Protocol expands the scope of reporting for the CRS to include new digital financial products, such
as Specified Electronic Money Products and Central Bank Digital Currencies, while simultaneously introducing
more-detailed reporting requirements and strengthened due-diligence procedures. It also updates the references to
the data protection legislation of the Contracting Parties.
(5) The text of the Amending Protocol, which is the result of the negotiations, duly reflects the negotiating directive
issued by the Council.
(6) Therefore, the Amending Protocol should be signed on behalf of the Union and the Joint Declarations attached to the
Amending Protocol should be approved.
(7) The European Data Protection Supervisor was consulted in accordance with Article 42(1) of Regulation (EU)
2018/1725 of the European Parliament and of the Council(4).
(1) OJ L 359, 4.12.2004, p. 33, ELI: http://data.europa.eu/eli/agree_internation/2004/828/oj.
(2) Council Directive (EU) 2023/2226 of 17 October 2023 amending Directive 2011/16/EU on administrative cooperation in the field
of taxation (OJ L, 2023/2226, 24.10.2023, ELI: http://data.europa.eu/eli/dir/2023/2226/oj).
(3) Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive
77/799/EEC (OJ L 64, 11.3.2011, p. 1, ELI: http://data.europa.eu/eli/dir/2011/16/oj).
(4) Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural
persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free
movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39,
ELI: http://data.europa.eu/eli/reg/2018/1725/oj).
ELI: http://data.europa.eu/eli/dec/2025/2120/oj 1/2EN
OJ L, 17.10.2025
(8) Commission Decision 2010/625/EU(5)stated that, for all the activities falling within the scope of Directive 95/46/EC
of the European Parliament and of the Council(6), Andorra is considered as providing an adequate level of protection
of personal data transferred from the Union. The Commission report of 15 January 2024 to the European
Parliament and the Council on the first review of the functioning of the adequacy decisions adopted pursuant to
Article 25(6) of Directive 95/46/EC confirms that Andorra continues to provide an adequate level of protection for
personal data transferred from the Union,
HAS ADOPTED THIS DECISION:
Article 1
The signing of the Amending Protocol to the Agreement between the European Union and the Principality of Andorra on
the automatic exchange of financial account information to improve international tax compliance is hereby authorised on
behalf of the Union, subject to the conclusion of the said Amending Protocol(7).
Article 2
The Joint Declaration of the Contracting Parties on the entry into force of the Amending Protocol, the Joint Declaration of
the Contracting Parties on the Agreement and the Annexes and the Joint Declaration of the Contracting Parties on Article 5
of the Agreement are hereby approved on behalf of the Union.
Article 3
This Decision shall enter into force on the date of its adoption.
Done at Luxembourg, 10 October 2025.
For the Council
The President
S. LOSE
(5) Commission Decision 2010/625/EU of 19 October 2010 pursuant to Directive 95/46/EC of the European Parliament and of the
Council on the adequate protection of personal data in Andorra (OJ L 277, 21.10.2010, p. 27, ELI: http://data.europa.eu/eli/dec/
2010/625/oj).
(6) Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard
to the processing of personal data and on the free movement of such data (OJ L 281, 23.11.1995, p. 31, ELI: http://data.europa.eu/
eli/dir/1995/46/oj).
(7) The text of the Amending Protocol will be published together with the decision on its conclusion.
2/2 ELI: http://data.europa.eu/eli/dec/2025/2120/oj