On November 18th 2016, Cyprus and India signed a revised double tax agreement to replace the one signed between the two countries back in 1994. The development is another welcome step for the business community as following the entry into force of the amending agreement, Cyprus will be retrospectively removed from the list of the Indian Notified Jurisdictional areas, the so called “Indian black list”, on which it has been placed as of November 2013.
Full details of the new agreement were published on November 25th in the Official Gazette of the Republic of Cyprus and the agreement will come into force after both countries have notified each other that the ratification process in each country has been completed.
The provisions of the treaty will be effective in Cyprus on or after 1 January following the date the Agreement enters into force and in India on or after 1 April of the fiscal year following the date it enters into force.
Below is a summary of the key amendments in the “new” agreement:
Note that under the Cyprus and Indian tax legislation there is no withholding tax on dividend payments in and out of the countries to non-residents. Furthermore, Cyprus does not impose any withholding taxes on interest and royalties paid to non-residents.