As enacted

Contents

Inland Revenue Act 2000 · As enacted · Chapter IX · Special Provisions Relating to the Taxation of Certain Profits and of Dividends Out of Such Profits

39. Rate of income tax on profits from certain undertakings carried on by a person other than a company

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

Where the taxable income of any person (other than a company) for any year of assessment includes any profits and income [within the meaning of paragraph (a) of section 3] from any—

(a)

agricultural undertaking ;

(b)

undertaking for the promotion of tourism ; or

(c)

undertaking for construction work ;

(hereinafter in this section referred to as “specified profits”)

and the rate of income tax payable on a part of such income hereinafter in this section referred to as “relevant part of income” exceeds fifteen per centum, then in regard to the relevant part of income, tax shall be computed as follows :—

(i)

if the relevant part of the income exceeds the amount of such “specified profits”—

(a)

the tax payable on such portion of the relevant part of the income as is equal to the amount of such specified profits, shall be at the rate of fifteen per centum ; and

(b)

the tax payable on the balance of the relevant part of the income shall be computed according to the rates of tax above fifteen per centum as are applicable thereto under this Act ;

(ii)

if the relevant part of the income does not exceed the amount of such specified profits, the tax payable on the entirety of the relevant part of the income shall be at the rate of fifteen per centum, notwithstanding anything to the contrary, to the other provisions of this Chapter or to Chapter VIII.

(2)

For the purposes of subsection (1)—

(a)

“agricultural undertaking” includes any undertaking for—

(i)

fishing ;

(ii)

cultivating land with plants of whatever description ; and

(iii)

provision of the services of management to any undertaking for cultivating land with plants of whatever description.

(b)

“any undertaking for the promotion of tourism” means an undertaking for the operation of—

(i)

any hotel or guest house approved by the Ceylon

Tourist Board ; or

(ii)

any restaurant graded by the Ceylon Tourist

Board as being in “Class A” or “Class B” ;

(iii)

any business of travel agent ;

(iv)

any business of transporting tourists ;

(v)

any business approved by the Ceylon Tourist

Board for providing facilities for recreation or sports.

(c)

“profits and income from any agricultural undertaking” means—

(i)

in the case of an undertaking referred to in sub-paragraph (iii) of paragraph (a), the profits and income from fees for providing the services of management ; and

(ii)

in any other case, the profits and income from the sale of produce of such undertaking without subjecting such produce to any process of production or manufacture :

Provided that where any person carries on any undertaking for subjecting the produce of any agricultural undertaking to any process of production or manufacture, the produce of the agricultural undertaking shall for the purpose of this subparagraph be deemed to have been sold to such undertaking for production or manufacture at the open market price prevailing at the time of the deemed sale and the profit from the sale of the produce of such agricultural undertaking shall be the profits arising from such deemed sale.

(d)

“undertaking for construction work” means an undertaking carried on by a resident person for the construction of any—

(i)

building ;

(ii)

roads or bridges ; or

(iii)

water supply, drainage or sewerage systems,

Read on from s 40

Chapter X

Companies

Read on from Chapter X