CYPRUS MAY CEASE TO BE CAPITAL GAINS TAX HAVEN

The party may soon be over for investors coming into India from Cyprus. The Double Taxation Avoidance Agreement (DTAA) between the two countries is all set to lose the capital gains tax exemption benefit. Both the governments are understood to have concluded negotiations on amendments to the tax treaty, following which residents, both individuals and companies of Cyprus, would have to pay Capital Gains Tax at the rate of 10%. A limitation on benefits clause to ensure ineligible entities cannot get a benefit under the tax treaty is also proposed to be inserted.