5 key things to know about India-Cyprus double-taxation treaty
The treaty will all allow Indian authorities to tax capital gains on investments routed through Cyprus.
Cyprus said that it has successfully completed double-taxation avoidance agreement (DTAA) negotiations with India on Thursday.
"On June 29, 2016, the negotiation on the Double Taxation Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income between Cyprus and India has been successfully completed, in New Delhi," Cyprus Finance Ministry said in a statement.
India had recently amended its bilateral treaty with Mauritius in May this year. By signing treaty with Cyprus, it marks another success for New Delhi in reworking its agreements.
Here are five things to know about India-Cyprus double-taxation treaty:
1. The double-taxation avoidance agreement grandfathers all income prior to April 1, 2017. This means share sale of investments made before this date will be exempt from capital gains tax.
2. The treaty will all allow Indian authorities to tax capital gains on investments routed through Cyprus.
3. It will lead to the removal of Cyprus from the Indian government's blacklist.
4. It will result in further developing the trade and economic links between Cyprus and India, as well as with other countries.
5. Cyprus is a major source of foreign fund flows into India. The country has received foreign direct investment (FDI) worth Rs 42,680.76 crore from Cyprus in the period between April 2000 to March 2016.
(With PTI Inputs)