Toward the end of June this year the Cyprus Finance Ministry announced that both India and Cyprus have completed negotiations on the bilateral tax treaty, which provides for source-based taxation of capital gains on share sale. The Ministry also revealed that the Double Taxation Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with regards to the tax on income between Cyprus and India had been concluded.
In the same statement, the Ministry declared that the "agreement reached provides for source-based taxation for gains from the alienation of shares; investments undertaken prior to April 1, 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."
The result of the agreement means that Cyprus will no longer be listed as a notified jurisdictional area. Moreover, it also paves the way for more established trade links between the India and Cyprus, through upgrading the network of Double Tax Conventions which aim to attract further investment to Cyprus as well and to promote its standing in the world of international business.