India has removed Cyprus, a notorious tax haven, off its blacklist more than three years after it was hit with the stigma.
The move gives a break to to investors who route their money through the island’s banks, LiveMint reported.
Cyprus went on the list on Nov. 1, 2013 under a so-called “notified jurisdiction” because it refused to provide financial information sought by the Indian government.
This means that investors can hope for some relief from the Indian tax department for investments routed through Cyprus in the intervening three-year period that attracted some of the stringent provisions such as increased withholding tax requirements.
“The Government of India has finally rescinded the notification of Cyprus as a non-cooperative jurisdiction. Coming on the heels of the new tax treaty, this will come as a big relief to investors and Indian companies that have raised capital from Cyprus investors,” Abhishek Goenka, partner–direct tax, PwC told LiveMint.
Cyprus’s removal comes after both countries agreed to changes in the double taxation avoidance agreement between both them.
The revised treaty signed by both the countries last month gives India the right to tax capital gains from sale of shares on investments made by Cyprus-based companies after 1 April 2017.