Inland Revenue Act 2017 · As enacted · Part I
55. Taxation of partners
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
For the purposes of calculating a partner’s income from a partnership for a year of assessment of the partner, the partner’s share of any partnership income shall be included or the partner’s share of any partnership loss of the relevant partnership year shall be deducted. The relevant partnership year is the year of assessment of the partnership ending on the last day of or during the year of assessment of the partner.
Gains on disposal of an interest of a partner in a partnership shall be treated as income from a business and included in calculating the income of the partner from the partnership and shall be calculated under Chapter IV subject to the adjustments in section 56.
Partnership income or a partnership loss allocated to partners under subsection (1) –
shall retain its character as to type and source;
shall be treated as an amount derived or expenditure incurred, respectively, by a partner at the end of the partnership’s year of assessment; and
shall be allocated to the partners proportionately to each partner’s share, unless the Commissioner-General, by notice in writing and for good cause, directs otherwise.
Tax paid under the provisions of this Act and foreign income tax paid or treated as paid by the partnership with respect to the partnership income shall be allocated to the partners, proportionately to each partner’s share, and shall be treated as paid by them. The allocation occurs at the time partnership income is treated as derived by the partners under paragraph (b) of subsection 3.
For the purposes of this section and subject to subsection (7) of section 53, a “partner’s share” shall be equal to the partner’s percentage interest in any income of the partnership as set out in the partnership arrangement.