On 29 June 2016, Cyprus successfully completed 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 with India.
The agreement provides for source based taxation for gains from the alienation of shares. It also provides that 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.
Following the entering into force of the amending Agreement, India will retrospectively rescind the classification of Cyprus in the 'Notified Jurisdictional Area' as from 1st of November 2013. It is expected that this agreement will contribute positively to the further development the trade and economic links between Cyprus and India. Cyprus consistently aims to maintain, upgrade and expand the network of its Double Tax Conventions and aims to further strengthen and attract foreign investment in Cyprus and elevate its standing as an international business centre.