Andorra will introduce income tax for the first time in its history as its European neighbours put pressure on it to reduce the practice of tax evasion.
Currently, there is no income tax applied to individuals or corporations within the small European nation, which is neighboured by Spain and France.
The head of the Andorran government Antoni Marti told French president Francois Hollande that he will introduce a bill before 30 June.
According to Mr Hollande's office, the principality will "gradually meet international tax standards".
The European Commission recently told the European Parliament that it wants every nation in the EU to share and exchange all types of income data in order to help tackle persistent tax evasion.
In order to make this a reality, EU finance ministers have agreed to start talks with Andorra, Switzerland, Liechtenstein, Monaco and San Marino about the sharing of such data.
Tax evasion costs EU states €1 trillion ($1.3 trillion) a year.
By Gary Cooper