On 30 June 2016 the negotiations between Cyprus and India for a revised Double Tax Treaty (DTT) have been successfully completed. This revised DTT is expected to be signed and ratified by both countries within the next few months, so it will enter into force as soon as possible. As soon as the DTT enters into force, India will remove Cyprus as a “Notified Jurisdictional Area’ with retroactive effect as from 1 November 2013.
The full details of the revised DTT have not been released yet. However, it must be noted that from the date of ratification of the DTT onwards the taxation of capital gains from the sale of shares will be taxed in the country where the company whose shares are sold. Under the grandfathering provisions agreed the right of taxation on the potential sale of shares acquired before 1 April 2017 will remain with the country of the seller.
It is expected that similar changes to DTT’s concluding by India with other countries (ie Mauritius) will follow in the next months.
We will keep you posted as soon as further information are received.