As enacted

Contents

Inland Revenue Act 2006 · As enacted · Chapter IX · Special Provisions Relating to the Taxation of Certain Profits and of Dividends Out of Such Profits

56. Rate of income tax on deemed exports of any person or partnership

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

(1)

Where any person or partnership who or which carries on any undertaking for the production or manufacture and supply to any specified undertaking referred to in subparagraph (i) of paragraph (c) of section 60–

(a)

of any commodity, other than black tea in bulk, crepe rubber, sheet rubber, scrap rubber, latex or fresh coconut, for export by such specified undertaking without further production or manufacture by such specified undertaking; or

(b)

of any goods for the production, manufacture or packaging by such specified undertaking of any commodity for export by such specified undertaking, the profits and income from such supply being profits and income within the meaning of paragraph (a) of section 3 other than any profits and income from the sale of capital assets, shall be chargeable with income tax in accordance with the succeeding provision of this section.

(2)

Where any person referred to in sub section (1) is a company (including a company being a partner of any such partnership) and the taxable income of such company for any year of assessment includes profits and income referred to in such subsection, then such company shall be chargeable with income tax at the rate of fifteen per centum in respect of such profits and income.

(3)

Where any person referred to in sub section (1) is an individual (including an individual being a partner of such partnership) and the taxable income of such individual for any year of assessment includes profits and income referred to in such subsection and the rate of income tax payable on a part of such income (hereinafter in this section referred to as the

“relevant part of income”) exceeds fifteen per centum, then in regard to the relevant part of the income, the tax shall be computed as follows :—

(a)

if the relevant part of the income exceeds the amount of such profits and income—

(i)

the tax payable on such part of the relevant part of the income as is equal to the amount of such profits and income shall be at the rate of fifteen per centum ; and

(ii)

the tax payable on the balance of the relevant part of the income shall be computed according to such of the rates above fifteen per centum as are applicable thereto under this Act ; and

(b)

if the relevant part of the income does not exceed the amount of such profits and income, the tax payable on the entirety of the relevant part of the income shall be at the rate of fifteen per centum, notwithstanding anything to the contrary in this Act.

(4)

The provisions of subsections (1), (2) and (3) shall apply if the supply referred to therein—

(a)

is made during the period for which–

(i)

the taxable income of the person who, or of any partner of a partnership which, carried on the specified undertaking referred to in subsection (1) is chargeable with income tax in accordance with the provisions of this

Chapter; or

(ii)

the export profits and income of the specified undertaking referred to in subsection (1) are exempt from income tax, under paragraph (b)

of subsection (1) of section 20 of the Inland

Revenue Act, No. 28 of 1979 or in terms of an agreement entered into by such specified undertaking with the Board of Investment of

Sri Lanka under section 17 of the Board of

Investment of Sri Lanka Law, No. 4 of 1978;

and

(b)

is a supply in respect of which such documentary evidence as is required to satisfy the Commissioner

General that the exports relating to such supply were in fact made, is adduced.

Read on from s 57