75/2015. Keywords: Inheritance tax, Double taxation, Gift duty, Estate duty, Anti-avoidance. The Third Protocol amends the DTAA with effect from 1 April 2017 to provide for source based taxation of capital gains arising on transfer of shares in a company. However, a grandfathering clause has been provided for investments made prior to 1 April 2017, in respect of which capital gains would continue to be taxed in the country of which taxpayer is a resident. In some cases one state will give a credit for taxes paid to another state, but not always.The revised DTAA between India and Cyprus signed on 18 November 2016, provides for source based taxation of capital gains arising from alienation of shares, instead of residence based taxation provided under the DTAA signed in 1994. 459-470, 1985; Victoria University of Wellington Legal Research Paper No. It also provides for assistance between the two countries for collection of taxes and updates the provisions related to Exchange of Information to accepted international standards. Thus, if this US domiciled individual were to pass away while in Ireland their beneficiaries will only be taxable on the value of US located assets and not assets located anywhere outside Ireland. LXXb Cahiers de Droit Fiscal International, pp. Further, a two-year transition period from 1 April 2017 to 31 March 2019 has been provided during which capital gains on shares will be taxed in source country at half of normal tax rate, subject to fulfillment of conditions in Limitation of Benefits clause.4. If you think about it, a country that is trying all sorts to lure foreign investment, yet fails to specifically address the IHT situation of an investor from Britain (by and large the largest exporter of property buyers to Spain! Increase the certainty of taxation, decrease the risk of cross-border taxationAlso, since each state makes its own rules on who is a resident for tax purposes, someone may be subject to the claims by two states on his or her income. College or university students may also be subject to claims of more than one state, generally if they leave their original state to attend school, and the second state considers students to be residents for tax purposes. Simultaneously, investments made before 1 April 2017 have been grandfathered and will not be subject to capital gains taxation in India. This means that Hungarian citizens receiving income from the 120-odd countries and territories that Hungary has no treaty with will be taxed by Hungary, regardless of any tax already paid elsewhere.The Protocol for amendment of the India-Mauritius Convention signed on 10 May 2016, provides for source-based taxation of capital gains arising from alienation of shares acquired from 1 April 2017 in a company resident in India. For example, if someone's legal/permanent domicile is in state A, which considers only permanent domicile to which one returns for residency but he or she spends seven months of the year (say April–October) in state B where anyone who is there longer than six months is considered a part-year resident, that person will then owe taxes to both states on money earned in state B. However, the benefit of 50% reduction in tax rate during the transition period shall be subject to the Limitation of Benefits Article. It operates as a credit. This will curb revenue loss, prevent double non-taxation and streamline the flow of investments.