Cyprus has said the Indian government had agreed to withdraw a notification that suspended tax benefits on investments from the island nation.

The withdrawal is subject to Cyprus, one of the main sources of foreign direct investment into India, adopting the global convention on exchange of tax information.

“As it concerns the renegotiation of the existing DTA (Double Tax Agreement) between Cyprus and India, which entered into force on December 21, 1994, a new DTA is expected to be finalised soon.

Notified jurisdictional area

“It was further agreed that, based on the discussions held, once the notification of Cyprus as a ‘notified jurisdictional area’ under section 94A of the Indian Income—Tax Act 1961 is rescinded, it will be with retrospective effect from November 1, 2013, date when the notification of India was issued,” the Cyprus government said in a statement on December 3. Cyprus and India held discussions from November 26-28 here, it said. Comments on the issue could not be obtained from India’s Finance Ministry. The Finance Ministry had classified the island nation as a notified jurisdictional area on grounds that Cyprus was not providing information requested by tax authorities under the taxation treaty. — PTI