India – Cyprus: Refunding of Indian Withholding Tax due to NJA

Shanda Consult offers assistance in refunding of increased withholding tax, which has been withheld by Indian Tax Authorities related to the NJA status of Cyprus between 01/11/2013 and 31/03/2017.

On 1st November 2013, the Indian Government notified Cyprus as a so-called “Notified Jurisdictional Area” (“NJA”), which is a term quite similar to “non-cooperative country”.

The main consequence was that Indian subsidiaries of Cyprus parent companies had to pay a total of 30% withholding tax on payments to the parent companies, including dividend payments, instead of 15% as per the provisions in the old Double Taxation Avoidance Agreement between the two countries. Persons resident of India who were receiving money in India from a person or entity located in Cyprus were required to disclose adequate information regarding the source of funds.

Upon the signing of a new Double Taxation Avoidance Agreement between India and Cyprus on 18/11/2016 and its entering into effect in India on 01/04/2017, the Government of India released Cyprus from the NJA status. Instead of the increased withholding tax of 30%, the normal rate of withholding tax applies as per the provisions of the new DTAA.

The legislation of India provides for the possibility of refunding the increased amounts of withholding tax during the period 18/11/2013 – 21/04/2017.

Shanda Consult’s Services for Cyprus Companies with Indian Subsidiaries and Indian Companies with Cyprus Parent Companies

Shanda Consult offers assistance regarding applications for refunding of excessive withholding tax paid, as described above. We furthermore assist with follow-up in India and the evaluation process.

To apply for the refund of excessive withholding tax paid as described above, a new Return of Income needs to be filed, after approval by the Indian Revenue Authorities and the Central Board of Direct Taxes of India.

Our services, which are offered in cooperation with our Indian partner being Chartered Accountants in Mumbai, comprise the following steps:

  • Assisting in filing ROI for Cyprus entities in India
  • Reviewing tax positions / ROI already filed
  • Assisting in obtaining CBDT approval for filing delayed ROI
  • Assisting in filing revised ROI
  • Following up with IRA to expedient processing of refund
  • Assisting Indian group entities on Cyprus transactions

Please contact us for further information, review of your company’s situation, and our quote.


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