Skip to content
srilawsby aturio
As enacted
EnglishSinhala සිංහල, official PDF on documents.gov.lkTamil தமிழ், official PDF on documents.gov.lk
Contents

Part I

35. Tax avoidance schemes

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

(1)

This section shall apply where the Commissioner-General is satisfied that –

(a)

a scheme has been entered into or carried out;

(b)

a person has obtained a tax benefit in connection with the scheme; and

(c)

having regard to the substance of the scheme, it can be concluded that a person, or one of the persons, who entered into or carried out the scheme did so for the sole or dominant purpose of enabling the person referred to in paragraph (b) to obtain a tax benefit.

(2)

Notwithstanding anything in this Act, the

Commissioner-General may determine the tax liability of the person who obtained the tax benefit as if the scheme had not been entered into or carried out, or as if a reasonable alternative to entering into or carrying out the scheme would have instead been entered into or carried out, or that any transaction which reduces or would have the effect of reducing the amount of tax payable by any person is artificial or fictitious and can make compensating adjustments to the tax liability of any other person affected by the scheme.

(3)

Where a determination or adjustment is made, the

Commissioner-General shall issue an assessment giving effect to the determination or adjustment.

(4)

The assessment made under subsection (3) shall be served within five years from the last day of the year of assessment to which the determination or adjustment relates.

(5)

For the purposes of this section -

“scheme” includes any course of action, trust, grant, agreement, arrangement, understanding, promise, plan, proposal or undertaking, whether express or implied and whether or not enforceable;

“tax benefit” means –

(a)

a reduction in a liability to pay tax, including on account of a deduction, credit, offset or rebate;

(b)

a postponement of a liability to pay tax;

(c)

any other advantage arising because of a delay in payment of tax; or

(d)

anything that causes –

(i)

an amount of gross revenue to be exempt income or otherwise not subject to tax; or

(ii)

an amount that would otherwise be subject to tax not to be taxed.

Read on from s 36

Part II

Read on from Part II

Schedules