95. Deduction of income tax from interest, & c, payable to persons outside Sri Lanka

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

(1)

Where any person or partnership in Sri Lanka pays or credits to any person or partnership out of Sri Lanka, any sum falling due as—

(a)

interest on debentures, mortgages, loans, deposits or advances; or

(b)

rent, ground rent, royalty or annuity which is payable either in respect of property in Sri Lanka or out of income arising in Sri Lanka, whether such sum is due from him or from another person or from a partnership, he shall be entitled, notwithstanding any agreement to the contrary, to deduct income tax at the appropriate rate specified in the Fourth Schedule to this Act, or where an agreement in force between the Government of

Sri Lanka and the Government of any territory in which such person or partnership is resident for the relief of double taxation at the appropriate rate specified in such agreement, on such sum and the amount of tax so deductible shall be a debt due from such person to the Republic and shall be recoverable forthwith or may be assessed and charged upon such person in addition to any income tax otherwise payable by him under this Act:

Provided that–

(a)

the Commissioner-General may, having regard to the total tax payable under this Act by any person or partnership out of Sri Lanka, by notice in writing, require any person in Sri Lanka to deduct for any year of assessment from any sums to be paid or credited by such person to the person or partnership out of Sri Lanka, income tax on such sums at a rate other than the appropriate rate specified in the Fourth

Schedule to this Act or the agreement for the relief of double taxation, as the case may be; the tax so deductible shall be recoverable and chargeable as aforesaid; and

(b)

the preceding provisions of this subsection shall not apply to any interest paid out of income not arising in Sri Lanka or to interest on any loan or advance made by a banker or to any interest paid to any person on moneys lying to his credit in foreign currency with any foreign currency banking unit.

(2)

Any person who deducts income tax in accordance with the provisions of subsection (1) from any sum paid or credited to a person or partnership out of Sri Lanka, shall issue to such person or partnership a statement in writing showing—

(a)

the gross amount of such payment or credit;

(b)

the rate and amount of the tax so deducted;

(c)

the net amount actually paid or credited.

(3)

Where the assessable income of a person includes a sum from which income tax has been deducted in accordance with subsection (1), he shall be entitled on production of statement relating to such sum issued in accordance with subsection (2), to a set-off against the tax payable by him, of the amount shown on such statement as the amount of tax deducted.

Read on from s 96