As enacted

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Inland Revenue Act 2006 · As enacted · Chapter III · Exemption from Income Tex

13. Miscellaneous exemptions from income tax

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

There shall be exempt from income tax—

(a)

the emoluments earned in any year of assessment in foreign currency by any individual resident in

Sri Lanka, in respect of services rendered by him in that year of assessment outside Sri Lanka in the course of any vocation carried on or exercised by him, if such emoluments (less such amount expended by such individual outside Sri Lanka as is considered by the Commissioner General to be reasonable personal expenses) are remitted by him to Sri Lanka;

(b)

the profits and income earned in foreign currency by a resident company or partnership carrying on or exercising any trade, business or vocation, in any year of assessment–

(i)

in respect of services rendered by that company or partnership in that year of assessment outside Sri Lanka (including services relating to any construction project) ;

and

(ii)

in respect of any off-shore business which does not in any way involve any goods manufactured or produced in Sri Lanka or any goods imported into Sri Lanka, in the course of carrying on or exercising such trade, business or vocation, if such profits and income (less any such amount expended by that company or partnership outside Sri Lanka as is considered by the Commissioner General to be reasonable expenses) are remitted to Sri Lanka through a bank ;

(c)

the profits and income earned in foreign currency by any partnership in Sri Lanka or any individual from any services rendered in or outside Sri Lanka, to any person or partnership outside Sri Lanka, being services rendered in the course of any profession, carried on or exercised by such individual or partnership, if such profits and income (less such reasonable amount as may be determined by the

Commissioner-General for personal expenses incurred outside Sri Lanka, where the services are rendered outside Sri Lanka by an individual) are remitted from outside Sri Lanka to such individual or partnership through a bank in Sri Lanka ;

(d)

the profits and income earned in foreign currency by any company resident in Sri Lanka from services rendered outside Sri Lanka, to any person or partnership outside Sri Lanka, in the course of carrying on or exercising any profession, if such profits and income are remitted to such company through a bank in Sri Lanka ;

(e)

the income accruing to a person receiving instruction at any university, college, school or other educational establishment from a scholarship, exhibition, bursary, or similar educational endowment;

(f)

any capital sum received by way of death gratuity or as compensation for death or injuries;

(g)

wound and disability pensions granted to members or ex-members of the Forces of Her Majesty, the

Queen of the United Kingdom;

(h)

United States Government disability pensions;

(i)

the profits and income within the meaning of paragraph (a) of section 3 arising to any person from the export of gold, gems or jewellery ;

(j)

such part of the profits and income arising from the sale for payment in foreign currency, of any gem or jewellery, being a sale made in Sri Lanka by any person authorized by the Central Bank of Sri Lanka to accept payment for such sale in foreign currency;

(k)

any prize received by a person as an award made by the President of the Republic of Sri Lanka;

(l)

any prize received by a person as an award made by the Government in recognition of an invention created, or any research undertaken, by such person;

(m)

any sum received by a person from the President’s Fund established by the President’s Fund Act, No. 7 of 1978;

(n)

any sum received by a person from the National

Defence Fund established by the National Defence

Fund Act, No. 9 of 1985;

(o)

such part of any sum as does not exceed three thousand rupees paid by the Sri Lanka Bureau of

Foreign Employment, established by the Sri Lanka

Bureau of Foreign Employment Act, No. 21 of 1985, to any person or partnership licensed by such

Bureau, to carry on the business of a foreign employment agency, in respect of any Sri Lankan for whom employment outside Sri Lanka has been provided or secured by such person or partnership;

(p)

such part of any sum as does not exceed three thousand rupees received in any year of assessment by the Sri Lanka Bureau of Foreign Employment, established by the Sri Lanka Bureau of Foreign

Employment Act, No. 21 of 1985, in respect of any

Sri Lankan for whom employment outside Sri Lanka has been provided or secured by such Bureau;

(q)

such part of any sum or the aggregate of sums as does not exceed one hundred thousand rupees received by any individual, as an award or awards in recognition of his excellence in the field of fine arts, literature or sports, being an award made with the prior written approval of the Minister in charge of the subject of fine arts, literature or sports, as the case may be;

(r)

any interest or discount accruing to the “Sudu Nelum

Movement”, established by the Government and registered under section 114 of the Trust Ordinance, being interest or discount on any sum of money deposited by the Sudu Nelum Movement with any commercial bank;

(s)

any profits and income within the meaning of paragraph (a) of section 3, derived by, arising from or accruing to any person from the sale of any bond, debenture or other debt instrument issued by a company and held by him, being a bond, debenture or other debt instrument which at the time of such sale is quoted in any official list published by any

Stock Exchange, licensed by the Securities and

Exchange Commission of Sri Lanka;

(t)

any profits and income derived by or accruing to any person or partnership other than any unit trust, mutual fund or any venture capital company, from the sale of any share, a right to any share, a bonus share or a share warrant in respect of which the share transaction levy under section 7 of the Finance Act,

No, 5 of 2005, has been charged ;

(u)

the profits and income earned in any year of assessment in foreign currency by any National

Association of Sports registered under the Sports

Law, No. 25 of 1973, in respect of services rendered by such Association, or in the course of taking part in any sport within the meaning of the Sports Law, in that year of assessment outside Sri Lanka, if such profits and income (less such amount as the

Commissioner – General considers to be reasonable expenses incurred outside Sri Lanka) are remitted by such Association to Sri Lanka ;

(v)

the profits and income of any person or any partnership derived from the participation as a competitor, official or organizer of any sporting or athletic event held in Sri Lanka and at which competitor from outside Sri Lanka participates.

For the purpose of this paragraph :—

(i)

“organizer” means any body of persons, corporate or unincorporate, established in accordance with any law for the time being in force in the country represented at such event by such body of persons or by one or more individuals or one or more teams nominated by or with the concurrence of such body of persons, being a body of persons which governs the conduct of any sporting or athletic event in the country so represented, and includes any body of persons the rules made by which, govern the conduct of such event ; and

(ii)

“competitor” in relation to any sporting or athletic event, means any team which participates in any such event or any individual who participates in any such event either as an individual or as a member of such team ;

(w)

any annuity accruing in any year of assessment to any individual who reaches in that year of assessment or had reached in any previous year of assessment the age of sixty years, being an annuity for life or for a period of not less than ten years, purchased from any bank or any insurance company registered under the Regulation of Insurance

Industry Act, No. 43 of 2000, and which accrues, in return for full consideration in money or moneys worth paid for the purchase of such annuity ;

(x)

interest received by a bank in Sri Lanka in respect of any loan granted to a company, the full amount of which is -

(i)

invested in the manner referred to in paragraph (c) of subsection (2) of section 20, where such company is a company referred to in that section ; or

(ii)

utilized to meet the expenditure referred to in paragraph (c) of subsection (2) of section 21, where such company is a company referred to in that section;

(y)

any royalty received by a non-resident person from a company with which an agreement has been entered into before April 1, 2004 by the Board of

Investment of Sri Lanka under section 17 of the

Board of Investment of Sri Lanka Law, No. 4 of 1978, in respect of any period during which the profits and income of that company are exempt from income tax under the terms of that agreement :

Provided that where such company opts, in lieu of the exemption from income tax under the terms of such agreement, to be charged with income tax, the exemption from income tax granted by this paragraph shall apply to any royalty received by any non-resident person from such company in respect of the period during which the profits and income of such company would, but for such option, have been so exempt from income tax.

(z)

any winning from a lottery, the gross amount of which does not exceed five hundred thousand rupees .

Read on from s 14

Chapter IV