Inland Revenue Act 2017 · As enacted · Part II
170. Third party debtors
Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk
Official translationFrom Department of Government Printing, unchanged
If a taxpayer is in default, the Commissioner-General may serve a notice in writing on a third party debtor.
On receiving a notice, the third party debtor shall pay to the Commissioner-General (on account of the taxpayer and by the date specified in the notice) the least of the following three amounts:—
the amount in respect of which the taxpayer is in default;
the money owed by the third party debtor to the taxpayer; and
the amount specified in the notice.
A notice may be served on a third party debtor in relation to an amount in a joint account only when:—
all the holders of the joint account have unpaid tax liabilities; or
the taxpayer may withdraw funds from the account
(other than a partnership account) without the signature or authorisation of the other account holders.
The date for payment specified in the notice shall not be before fifteen days following the date the third party debtor is served with the notice.
On receiving a notice under subsection (1), the third party debtor shall not pay any amount to the taxpayer until the Commissioner-General withdraws the notice.
As soon as practicable after service of the notice on the third party debtor, the Commissioner-General shall serve the taxpayer with a copy of the notice.
Amounts payable to the Commissioner-General by a third party debtor under this section shall be a personal liability of the third party debtor, which may be collected in the same manner as a tax.
Money owed to a taxpayer shall include—
amounts currently owing or that may subsequently become owing to a tax payer;
amounts held or that may subsequently be held for or on account of a tax payer;
amounts held or that may subsequently be held on account of a third person for payment to a tax payer;
amounts held by a person who has authority from a third person to pay the money to a tax payer; and
in relation to a third party debtor that is a financial institution, amounts that the tax payer holds in an account with the institution.
A notice may be served under this section on the taxpayer’s employer, requiring the employer to withhold and to pay to the Department, for a specified period, some part of the future wages or salary that becomes payable to the tax payer.
The first seventy five thousand rupees of wages per month shall not be subject to withholding under a notice referred to in subsection (9).
When the third party debtor fails to pay the amount specified within the time specified in a notice under this section, the provisions of this Act apply as if such amount were tax due and payable by the third party debtor on the date by which the third party debtor was required to make the payment to the Commissioner-General.
In this section:—
“money” includes a debt obligation denominated or payable in money; and
“third party debtor”, in relation to a taxpayer, means a person who owes money to the tax payer.