🇮🇳 Tax Treaty
Cyprus–India Double Tax Treaty
The Cyprus-India double tax treaty provides a 10% withholding rate on royalties and dividends, making Cyprus an efficient jurisdiction for holding companies investing in India and for IP licensing to Indian subsidiaries.
Withholding Tax Rates at a Glance
(reduced rate)
(Cyprus side)
Full Withholding Tax Rates
| Payment Type | Treaty Rate | Conditions |
|---|---|---|
| Dividends (standard) | 10% | Standard WHT rate |
| Dividends (reduced) | 10% | |
| Interest | 10% | On interest payments between the countries |
| Royalties | 10% | On royalties, licences, and IP income |
| Capital Gains (Cyprus side) | 0% | Gains taxable in India for Indian-sited assets; 0% in Cyprus |
Treaty signed: 1994. In force: 1994. Rates are treaty maxima — domestic law or EU directives may reduce them further.
Key Treaty Benefits
- ✓ 10% WHT on interest and royalties (vs Indian domestic 20-25%)
- ✓ 10% WHT on dividends (reduced from domestic rate)
- ✓ Efficient route for technology licensing between India and Cyprus
Common Cyprus–India Structures
- → Cyprus IP company licensing software to Indian subsidiary — 10% royalty WHT
- → Cyprus holding company for Indian venture — 10% dividend WHT
Planning Notes
India renegotiated several treaties following the BEPS initiative. The India-Cyprus treaty was amended in 2016 with a grandfathering provision for existing investments. Capital gains sourcing rules changed — gains on Indian shares acquired before 1 April 2017 are still protected.
Dual Residency Tiebreaker
Mutual agreement procedure
Planning a Cyprus–India structure?
Treaty rates are only part of the picture. We help you design and implement Cyprus company structures that take full advantage of the Cyprus–India double tax treaty — with genuine substance and robust documentation.