India and Cyprus have agreed to revise their tax treaty under which capital gains tax will be levied on sale of shares on investments made after April 1, 2017, thus bringing the island nation at par with Mauritius in terms of tax treatment on investments. The new Cyprus Double Taxation Avoidance Agreement (DTAA), which has been agreed upon by both the countries, would provide for source-based taxation of capital gains on transfer of shares. As per an agreement reached between India and Cyprus on June 29, investments made prior to April 1, 2017, will be grandfathered.

The completion of the negotiation on avoidance of double taxation and the prevention of fiscal evasion will also pave the way for the removal of Cyprus from the list of ‘Notified Jurisdictional Areas’ retrospectively from November 2013.

Did You Know?

• Cyprus is an island country in the Eastern Mediterranean Sea, off the coasts of Syria and Turkey.
• The earliest known human activity on the island dates to around the 10th millennium BC. Archaeological remains from this period include the well-preserved Neolithic village of Khirokitia, and Cyprus is home to some of the oldest water wells in the world.
• As a strategic location in the Middle East, it was subsequently occupied by several major powers, including the empires of the Assyrians, Egyptians andPersians, from whom the island was seized in 333 BC by Alexander the Great.
• Cyprus was placed under British administration based on Cyprus Convention in 1878 and formally annexed by Britain in 1914. Even though Turkish Cypriots made up only 18% of the population, the partition of Cyprus and creation of a Turkish state in the north became a policy of Turkish Cypriot leaders and Turkey in the 1950s.
• Capital : Nicosia
• Currency : Euro