November 10, 2013 3:36:08 am
The government of Cyprus has said it will hold talks with Indias income tax department this month to help remove the tag of a tax-non-cooperating jurisdiction that India had given the tag to the Mediterranean island nation last week.
On November 1,the income tax department had notified Cyprus as a jurisdiction that does not allow effective exchange of tax information and imposed rigorous transfer pricing audits on all payments between assesses in both the countries.
The move would attract a 30 per cent withholding tax on all payments from India to Cyprus.
Indias move was part of its efforts to check tax evasion that allegedly take place under the double tax avoidance treaty that India has with many nations.
Cyprus described the Indian decision as unilateral and added it was important to clarify that the double tax treaty between the two countries has not been terminated. It said the move has directly affected the business communities in both the countries.
It is the position of the Cypriot Government that any discrepancies and points that need clarification can only be resolved through direct consultations between the concerned competent authorities,which have been agreed to take place within November 2013, a statement issued by Cyprus said. FE
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