104. Profits and income or loss from transactions between associated undertakings to be determined having regard to the arm’s lengthprice

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

(1)

Any profits and income arising, derived or accruing from, or any loss incurred in any transaction entered into between two associated undertakings shall be ascertained having regard to the arm’s length price.

(2)

Where it appears to the Commissioner-General that the profit and income or the loss referred to in subsection (1), has not been as ascertained having regard to the arm’s length price, he may, in writing addressed to the person referred to in subsection (1), require him to prove to the satisfaction of the

Commissioner-General, that such profit and income or such loss, as the case may be, has in fact been ascertained having regard to the arms length price. Where such person fails to so prove, the Commissioner-General may estimate the amount of the profit and income or the loss, as the case may be, referred to in subsection (1), and make an assessment accordingly.

(3)

The arm’s length price referred to in subsection (1)

shall be determined on the basis of any one or more of the methods, prescribed for that purpose.

(4)

For the purposes of this section—

(a)

an undertaking shall be deemed to be an associated undertaking of another undertaking, if the first-mentioned undertaking participates directly or indirectly or through one or more intermediaries, in the control of the second-mentioned undertaking in such manner or to such extent as may be prescribed;

(b)

“arm’s length price” means a price which is applied in uncontrolled conditions in a transaction between persons, other than associated undertakings.

L – PETROLEUM EXPLORATION AND EXPLOITAION

Read on from s 105