61. Income tax to which any resident company is liable

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

(1)

The income tax to which any company resident in Sri Lanka in any year of assessment shall be liable for that year of assessment, shall consist of an amount–

(a)

calculated on the taxable income of such company for that year of assessment at the appropriate rate specified in the Second Schedule to this Act ;

(b)

equal to ten per centum of the aggregate amount of the gross dividends distributed by such company, not being a unit trust or mutual fund approved by the Securities and Exchange Commission of Sri

Lanka, in that year of assessment out of the profits for any year of assessment, other than any such dividends distributed–

(i)

to any company or other body of persons who or which is exempt from income tax under paragraph (a) or paragraph (c) of section 7;

(ii)

to any unit trust or mutual fund approved by the Securities and Exchange Commission of

Sri Lanka ;

(iii)

to any shareholder who is exempt from income tax under seciton 10, in respect of such dividend; or

(iv)

out of any dividend received from another resident company.

(c)

in the case of any public corporation not less than seventy-five per centum of the capital of which is provided by the Government other than by way of loan, an amount equal to twenty-five per centum of the balance of its profits after deducting therefrom the income tax payable for that year of assessment under paragraph (a) :

Provided that where the aggregate amount of any gross dividend distributed in that year of assessment out of the profits on which the taxable income of such corporation is computed for any year of assessment—

(i)

is not less than twenty-five per centum of such balance, the provisions of this paragraph shall not apply; and

(ii)

is less than twenty-five per centum of such balance, the tax to which such public corporation is liable under this paragraph, for that year of assessment, shall be an amount equal to the excess of twenty-five per centum of such balance over such amount of such dividend.

For the purposes of this paragraph, the profits of the

Insurance Corporation Limited of Sri Lanka shall be deemed not to include its profits from the business of life insurance ;

(d)

in the case of any company liable to pay tax under paragraph (a) of this subsection at a rate not less than thirty per centum for any year of assessment an amount equal to two and one half per centum of the taxable income of such company and such tax to be credited to the

Human Resources Endowment Fund established by the Government:

Provided however, such amount of tax shall be credited to the Consolidated Fund, pending the establishment of the Human Resources Endowment

Fund.

(2)

The amount of gross dividend in relation to any dividend received from another company, shall be such amount of the dividend received.

Read on from s 62

Chapter XI