India, Cyprus complete tax treaty negotiations

Cyprus says it has successfully completed double taxation avoidance agreement (DTAA) negotiations with India, marking another success for New Delhi in reworking its agreements.

India had recently reworked its treaty with Mauritius. The reworked agreement will come into force from April 1, 2017.

"On June 29th, 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 was successfully completed, in New Delhi" the finance ministry of Cyprus said in a statement.

It went on to say that the Indian Authorities will proceed with retrospectively rescinding the classification of Cyprus in the `Notified Jurisdictional Area` as of 1st of November 2013, the Ministry noted.

It said the agreement will "further develop the trade and economic links between Cyprus and the Government of the Republic of India, as well as with other countries".

The agreement provides for source based taxation for gains from the alienation of shares. "Investments undertaken prior to April 1st 2017 are grandfathered with the view that taxation of disposal of such shares at any future date remains with the contracting state of residence of the seller," the statement said.