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Contents

Part I

85. Withholding from service fees and contract payments

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

(1)

Subject to subsection (3), a person shall withhold tax at the rate provided for in paragraph 10 of the First

Schedule to this Act where such person –

(a)

pays a service fee with a source in Sri Lanka to a resident individual who is not an employee of the payer –

(i)

for teaching, lecturing, examining, invigilating or supervising an examination;

(ii)

as a commission or brokerage to a resident insurance, sales or canvassing agent;

(iii)

as an endorsement fee;

(iv)

in relation to the supply of any article on a contract basis through tender or quotation;

or

(v)

for such other matters as may be prescribed by regulation; or

(b)

pays a service fee or an insurance premium with a source in Sri Lanka to a non-resident person.

(2)

Subject to the provisions of subsection (3), regulations may be made prescribing –

(a)

that a resident person shall withhold tax when the person makes a payment to a non-resident person of a type referred to in paragraph (h) or (i) of section 73 (land, sea or air transport or telecommunication services); and

(b)

the rate at which the tax referred to in paragraph (a)

shall be withheld.

(3)

This section shall not apply to –

(a)

payments subject to withholding under section 83;

(b)

payments made by individuals, unless made in conducting a business;

(c)

payments that are exempt amounts; or

(d)

payments of specified fees in respect of which a certificate is presented by the recipient person confirming that the payments are chargeable with the Economic Service

Charge under the Economic Service Charge

Act, No. 13 of 2006.

.