Cyprus and India renegotiate DTA (Double Taxation Agreements)

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09.12After India labeled Cyprus as a ‘notified jurisdictional area’ back at the beginning of November they effectively tore up the tax agreement between the two countries, which has stood since December 1994. At the end of November a Cypriot delegation visited New Delhi in an attempt to renegotiate the DTA. The two delegations agreed that Cyprus could address the accusations that India made for the interruption in the agreement in two steps. Step one is to bring in to the new DTA the provisions of Article 26 of the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention (approved by the OECD Council on July 17, 2012) relating to exchange of information. Step two is to improve communications between the two countries and ‘exert every effort in facilitating each other in processing requests and responses in a swift and effective manner’. The Finance Minister Harris Georgiades will be heading another delegation this time to Moscow to discuss a similar subject, after a report made by Russian media stated the Russian Finance Ministry is considering putting Cyprus back on the black list of non-cooperative ‘tax havens’, just 11 months after the country was taken off the list. The report came when Cyprus along with Luxembourg, the British Virgin Islands, Switzerland and the Seychelles was given poor rankings at the Global Forum overseen by the OECD with regards to meeting international standards on tax transparency.