As enacted

Contents

Finance Act 2004 · As enacted · Part I · Imposition of an Economic Service Charge

3. Service Charge to be set off from relevant income tax

Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk

(1)

The amount of any Service Charge paid by any person or partnership for any relevant year of assessment may be deducted from the relevant income tax payable by that person or partnership for that relevant year of assessment

(hereinafter referred to as the “first mentioned relevant year of assessment”).

(2)

The balance, if any, of such service charge after its deduction in accordance with subsection (1) shall be deducted from the relevant income tax payable by such person or partnership for the relevant year of assessment immediately succeeding the first mentioned relevant year of assessment

(hereinafter referred to as the “ first succeeding relevant year of assessment”).

(3)

The residue if any of the balance, of such service charge after its deduction in accordance with subsection (2)

shall be deducted from the relevant income tax payable for the relevant year of assessment immediately succeeding the first succeeding relevant year of assessment (hereinafter referred to as the “second succeeding relevant year of assessment”).

(4)

In no circumstances shall—

(a)

the aggregate deduction exceed the amount of such

Service Charge ; and

(b)

the remaining portion, if any of the residue referred to in subsection (3) after its deduction in accordance with subsection (3), be deducted from any income tax payable for any relevant year of assessment succeeding the second succeeding relevant year of assessment.

(5)

For the purposes of this section and in relation to any person or partnership and to any relevant year of assessment, the expression—

“relevant income tax payable” means the sum which bears to the aggregate statutory income of that person or partnership for that relevant year of assessment from every trade, business, profession or vocation carried on or exercised by that person or partnership, other than any trade, business, profession or vocation the commercial operations of which commenced, whether by such person or partnership or by any other person or partnership, on the date which falls within the period of thirty six months immediately preceding the first day of that relevant year of assessment, the same proportion as the total income tax payable by such person or partnership for that relevant year of assessment bears to the total statutory income of that person or partnership for that relevant year of assessment ; and

“total income tax payable” means the sum ascertained by the application of the income tax rate prescribed in the appropriate Schedule to the Inland Revenue Act, to the taxable income of such person or partnership for that relevant year of assessment.

Read on from s 4

Part II