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Tax agreement with India

21/11/2016 09:43
Cyprus and India signed on Friday, in Nicosia, an agreement on the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

The agreement, signed by the Cypriot Minister of Finance, Harris Georgiades and the High Commissioner of India in Cyprus, Ravi Bangar, provides for source based taxation for gains from the alienation of shares.

Following the signing of the agreement, the Finance Minister spoke of a “very important occasion”.

“The completion of the negotiation and the successful agreement on all pending issues pave the way for the removal of Cyprus from the list of Notified Jurisdictional Areas retrospectively as of 1st November 2013”, he told the press.

He added that new opportunities open up for an expansion of the already excellent political and economic ties between Cyprus and India. “And I do hope and I strongly believe that the signing of this agreement will indeed lead to the further development of commercial and economic links”.

On his part, the Indian High Commissioner highlighted that the signing of the agreement marks an historic day between India and Cyprus relations. “This is a milestone for both countries to embark on a journey of further consolidating the gains of the past and open a new path for expanding the relations economically, commercially and investment-wise”.

Bangar pointed out that the Indian economy is the fastest-growing economy in the world today with a growth rate of higher than 7%. “It offers excellent opportunities for businesses in Cyprus to plug into the Indian economy and benefit mutually in this engagement”, he added.

“Now I think the ball is entirely in the hands of the business community” he indicated.

The High Commissioner announced that the Ministers of Commerce of Cyprus and India will exchange visits.

The Agreement reached 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, a press release of the Finance Ministry said.

Upgrading and expanding the network of Double Tax Conventions is of high economic and political importance and aims to further strengthen and attract foreign investment in Cyprus as its standing an international business center is elevated, the press release said.