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A further step towards implementation of the renegotiated double tax avoidance agreement between Cyprus and India has taken place with the announcement that the Indian Cabinet has approved the document.
A further step towards implementation of the renegotiated double
tax avoidance agreement between Cyprus and India has taken place
with the announcement that the Indian Cabinet has approved the
document. This follows an earlier announcement that negotiations at
the official level had been successfully concluded.1
As was widely expected following similar changes to India's
double tax agreements with Mauritius and Singapore, the revised
agreement provides for source-based taxation of gains from the
alienation of shares.
However, investments undertaken before April 1 2017 are
grandfathered, with taxation rights over gains on the disposal of
such shares at any future date remaining solely with the state of
seller's residence. When the amended agreement enters into
force, the Indian authorities will rescind the classification of
Cyprus as a notified jurisdictional area under Section 94A of the
Indian Income Tax Act 1961, with retrospective effect from November
1 2013.
Footnote
1. For further information please see "Negotiations
to amend Cyprus-India double tax agreement
concluded".
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