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 has been successfully completed, in New Delhi. The completion of the negotiation and the agreement reached on all pending issues will pave the way for the removal of Cyprus from the list of notified jurisdictional areas place in November 2013.

It has been agreed that, following the entering into force of the amending Agreement the Indian Authorities will proceed with retrospectively rescinding the classification of Cyprus in the 'Notified Jurisdictional Area' as from 1st of November 2013.

The text has been agreed between the two negotiating teams of the Contracting States and will contribute to 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 reached provides for source based taxation for gains from thealienation of shares; investments undertaken prior to April 1st 2017 are grandfathered withthe view that taxation of disposal of such shares at any future date remains with thecontracting state of residence of the seller.

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.

We will be following this announcement with a more detailed analysis once the DTA is published.