According to reports in the Indian media, the Cyprus and Indian governments have exchanged notifications that their respective internal procedures for the entry into force of the new double tax agreement between the two countries were completed on 14 December 2016, and the agreement entered into force on that date. This means that the agreement will have effect in Cyprus in respect of tax withheld at source for amounts paid on or after 1 January 2017 and in respect of other taxes for years of assessment beginning on or after 1 January 2017. In India, where the tax year begins on 1 April, the agreement will have effect in respect of tax withheld at source for amounts paid on or after 1 April 2017 and in respect of other taxes for years of assessment beginning on or after that date.
Simultaneously with the agreement entering into force, on 14 December 2016 the Indian tax authorities rescinded the designation of Cyprus under section 94A of the Income Tax Act 1961 as a notified jurisdictional area, with retrospective effect from 1 November 2013.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.