Cyprus to drop out of blacklist

India and Cyprus on Friday signed revised tax treaty that will remove the island nation from New Delhi's blacklist with retrospective effect from 2013.
 
Like revised treaty with Mauritius, India will gain the right to tax capital gains on investments routed through Cyprus from April 1, 2017. However, unlike the Mauritius treaty, there does not appear to be a transition period of two years for imposing capital gains tax under the revised double taxation avoidance agreement (DTAA) signed in Nicosia, capital of Cyprus.
 
The treaty with Mauritius allows capital gains tax to be half from April 1, 2017, to March 31, 2019.
 

 

Also, there is no mention of withholding tax on interest payments in the treaty with Cyprus, Abhishek Goenka of PwC said.
 
He said the tax was imposed at 7.5% under the India-Mauritius treaty. In existing India-Cyprus DTAA, the withholding tax stood at 10% and there was expectation that the rate would be lowered to 7.5% in this case as well.
 
India had placed Cyprus on blacklist for not providing financial information sought by New Delhi in November 2013.
 
The new pact provides for exchange of banking information and allows use of such information for purposes other than taxation with approval of competent authorities of the country.

 
India, UK sign three advance pricing pacts
 
India and the United Kingdom on Friday signed three advance pricing agreements aimed at reducing litigation in Indian transfer pricing. The Central Board of Direct Taxes signed the three pacts taking the total APAs signed (bilateral and unilateral) to 111.