Introduction: Lok Sabha Unstarred Question No. 1330 seeks information about India’s Trade and Double Tax Treaty with Cyprus. This article provides comprehensive insights into the treaty, including its signing date, benefits for both nations, tax recovery provisions, and details regarding Cyprus’s Golden Passport program.
Detailed Analysis:
1. India-Cyprus Double Tax Treaty:
- The Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion, commonly known as the Double Tax Treaty (DTAA), was signed between India and Cyprus. This agreement aims to prevent double taxation on income and evade fiscal evasion.
2. Signing Date and Benefits:
- The original DTAA was signed on 13th June 1994 and later replaced by a new DTAA on 18th November 2016. The revised treaty came into force on 14th December 2016. Its primary objective is to provide benefits in avoiding double taxation for residents of both India and Cyprus.
3. Tax Recovery Provisions:
- The DTAA includes provisions for the exchange of information (Article 26) and assistance in the collection of taxes (Article 27). These provisions enhance cooperation between the two nations in deterring tax evasion and facilitating the recovery of taxes.
4. Cyprus Investment Programme and Golden Passport:
- The Cyprus Investment Programme, which granted citizenship to non-Cypriot citizens, including those of Indian origin, has been terminated since 1st November 2020. However, details of beneficiaries under this program are not disclosed by Cypriot authorities.
Conclusion: India’s Double Tax Treaty with Cyprus, established to avoid double taxation and prevent fiscal evasion, plays a crucial role in fostering economic cooperation. The treaty’s provisions for information exchange and tax recovery contribute to the deterrence of tax evasion. Additionally, the termination of the Cyprus Investment Programme and the Golden Passport reveals regulatory changes in citizenship grants, emphasizing transparency in such programs. Understanding these aspects is essential for businesses and individuals engaged in cross-border transactions between India and Cyprus.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA
UNSTARRED QUESTION NO. 1330
TO BE ANSWERED ON MONDAY, THE 11th DECEMBER, 2023
AGRAHAYANA 20, 1945 (SAKA)
TRADE AND DOUBLE TAX TREATY WITH CYPRUS
† 1330 SHRI KAUSHALENDRA KUMAR:
SHRI SANTOSH KUMAR:
Will the Minister of FINANCE be pleased to state:
(a) whether the Government has signed any Trade and Double Tax Treaty with the Government of Cyprus;
(b) if so, the details of date on which the said treaty was signed along with the benefits being derived from the trade between the two countries;
(c) whether both the countries have also derived any tax recovery benefit as well;
(d) if so, the details thereof;
(e) whether Cyprus issues Golden Passport to the citizens of Indian origin; and
(f) if so, the details thereof?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)
(a) Yes, Sir. India has signed an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income with Cyprus (“the DTAA”). There is no treaty in respect of trade between the two countries.
(b) The original DTAA between India and Cyprus was signed on 13th June, 1994 which was replaced by a new DTAA on 18th November, 2016. It entered into force on 14h December, 2016 and provides for avoidance of double taxation in the case of residents of the two countries.
(c) & (d) The DTAA provides for exchange of information and assistance in collection of taxes as per Articles 26 and 27 of the DTAA respectively. These provisions create deterrence against tax evasion and facilitate recovery of taxes.
(e) & (f) Under the Cyprus Investment Programme, non-Cypriot citizens were granted citizenship, however, the Programme has been terminated since 01 November 2020.The details of such beneficiaries are not published by the Cypriot authorities.
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