Cyprus To Loose Tax Haven Status For Indians
information on bank account holders, is now going to withdraw the favourable
tax treatment available to investors from the
treaty.
India is looking to amend a clause in the tax
treaty that offers benefits similar to India-Mauritius double taxation
agreement – exemption from tax on capital gains and a lower rate of 10% tax on
interest, royalties and fees for technical services.Cyprus
of countries sending foreign direct investment
toIndia
route.
treaty that offers benefits similar to India-Mauritius double taxation
agreement – exemption from tax on capital gains and a lower rate of 10% tax on
interest, royalties and fees for technical services.
of countries sending foreign direct investment
to
route.
The two sides have already held discussions and
indications are thatIndia India
FDI fromCyprus
period out of cumulative flows of $7.19 billion.India
displeasure withCyprus
information on tax evaders under the agreement between the two countries for
avoidance of double taxation of income and prevention of tax evasion in force
since 1994.
indications are that
FDI from
period out of cumulative flows of $7.19 billion.
displeasure with
information on tax evaders under the agreement between the two countries for
avoidance of double taxation of income and prevention of tax evasion in force
since 1994.
Stepping up the pressure, India
declaredCyprus
jurisdiction and suspended tax benefits available under the treaty. The
non-cooperative jurisdiction tag meant that all payments made to Cyprus
attracted a 30% withholding tax and Indian entities receiving money from there
were required to disclose the source of funds and forego deductions of
expenditure and allowances arising on account of a transaction with any entity
from Cyprus.Cyprus
jurisdiction to be dubbed non-cooperative under stringent penal provisions in
the 2011-12 Budget to deal with countries that don’t share information on tax
evasion.
declared
jurisdiction and suspended tax benefits available under the treaty. The
non-cooperative jurisdiction tag meant that all payments made to Cyprus
attracted a 30% withholding tax and Indian entities receiving money from there
were required to disclose the source of funds and forego deductions of
expenditure and allowances arising on account of a transaction with any entity
from Cyprus.
jurisdiction to be dubbed non-cooperative under stringent penal provisions in
the 2011-12 Budget to deal with countries that don’t share information on tax
evasion.
and agreed to drop the tag after
information exchange agreement in the bilateral tax treaty for active exchange
of information. Both sides had detailed discussions after
revisit the tax sops available under the treaty just as it is doing with
its willingness to incorporate a ‘limitation of benefit’ clause in the treaty
to ensure only genuine investors benefit from favourable tax treatment offered
by the pact.
the alleged misuse of the treaty by investors from other countries that route
their investments into the
the tax exemption.
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