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Cyprus revises tax treaty with India, ratifies new tax treaties, announces 2016 NID yields, and expedites ruling process

In brief, The Cyprus government has reported several important tax developments that will affect multinational enterprises doing business in Cyprus. Regarding tax treaties:  The Cyprus government on June 30, 2016, announced that it completed negotiations and reached an agreement in writing for a revised tax treaty between Cyprus and India.  The first tax treaty between Cyprus and Bahrain signed on March 9, 2015, entered into force on April 26, 2016, and will take effect on January 1, 2017.  The first tax treaty between Cyprus and Latvia, signed on May 24, 2016, was ratified by Cyprus on June 3, 2016. The treaty will take effect on January 1 of the year after the countries complete the legal formalities to bring the treaty into force. The Cyprus Tax Authority (CTA) announced a list of various countries’ interest yields on 10-year government bonds for purposes of the notional interest deduction (NID). The list includes Cyprus, Czech Republic, Germany, India, Latvia, Poland, Romania, Russia, Ukraine, and United Arab Emirates. The CTA also announced that written responses to expedited advance ruling requests will be issued within 21 business days.

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