Inland Revenue Act 2000 · As enacted · Chapter X · Companies
61. Resident company entitled to deduct tax from any dividend
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
Every resident company, other than a quoted public company, shall be entitled to deduct from the amount of any dividend payable to any shareholder, other than any shareholder whose profits and income are exempt from income tax under paragraph (a) of section 8, in the form of money or an order to pay money out of the profits on which the taxable income of that company is computed for any year of assessment, income tax equal to fifteen per centum ;
Provided that nothing in the preceding provisions of this subsection shall apply to any dividend declared by a quoted public company to any resident person.
For the purposes of this section in computing the amount of a dividend payable to any shareholder by a company, such part of that dividend as consists of any part of the amount of a dividend received by that company from another resident company shall not be taken into account.
Every person who issues a warrant, cheque or other order drawn or made in payment of any dividend which becomes payable by a resident company during any year of assessment shall annex thereto a statement in such form as may be specified by the Commissioner-General setting out—
the gross amount which after deduction of income tax thereon corresponds to the net amount actually paid ;
the sum deducted as income tax ;
the net amount actually paid ;
the composition of the gross dividend indicating separately the amount paid out of—
exempt dividends received ;
dividends received, in relation to which advance company tax has been paid at fifty four per centum ;
dividends received, in relation to which advance company tax has been paid at fifty per centum ;
dividends received, in relation to which advance company tax has been paid at thirty three and one-third per centum ;
dividends received, in relation to which advance company tax has been paid at twenty seven per centum ;
dividends received, in relation to which advance company tax has been paid at twenty five per centum ;
dividends received, in relation to which advance company tax has been paid at seventeen per centum ;
dividends received, in relation to which advance company tax has been paid at eleven per centum ;
dividends received, in relation to which advance company tax has been paid at eight per centum ;
dividends received, in relation to which advance company tax has been paid at five per centum ;
other dividends received ;
income exempt from income tax ;
profits and income taxable at rates other than those specified in the Second Schedule to this
Act ; and
other profits and income .
the advance company tax paid in relation to such part of the dividend paid out of the other profits and income referred to in sub-paragraph (xiii) of the foregoing paragraph as consists of a qualifying distribution ;
advance company tax paid by other resident companies in relation to such part of that dividend as is paid out of a dividend referred to in sub-paragraph (ii), sub-paragraph (iii), sub-paragraph (iv), sub-paragraph (v), sub-paragraph (vi), sub-paragraph (vii), sub-paragraph (viii), sub-paragraph (ix) or sub-paragraph (x) of paragraph (d).
Every company resident in Sri Lanka shall, for every year of assessment furnish to the Commissioner-General on or before the thirtieth day of November immediately succeeding the end of that year of assessment, a statement in such form as may be specified by the Commissioner-General setting out the particulars of—
advance company tax paid in that year of assessment ;
any payments made in that year of assessment in respect of tax under paragraph (a) of subsection (1)
of section 53 for any year of assessment ;
any payments made in that year of assessment in respect of tax under section 32H or section 32K or section 32M and section 32N of the Inland Revenue
Act, No. 28 of 1979 for any year of assessment ; and
any payments made in the year of assessment in respect of tax under section 45, section 47, section 49
and section 50 of this Act.
Where the statement referred to in subsection (2)
discloses that a shareholder of a resident company received a dividend which included the amount of any dividend received from any other resident company, then that amount shall, for the purposes of determining the statutory income of such shareholder for any year of assessment, be increased by seventeen and eleven-seventeenth per centum and he shall be entitled to deduct, from the tax payable by him, an amount equal to the said seventeen and eleven-seventeenth per centum :
Provided, however, that the preceding provisions of this subsection shall not apply to, or in respect of—
a shareholder if such shareholder is a company ; or
the amount of any dividend received from any other company if such dividend is exempt from income tax under this Act.
Where the assessable income of a person other than a company includes a dividend from a resident company in the form of money or of an order to pay money, he shall be entitled, on production of a statement relating to such dividend made in accordance with subsection (2), to deduct from the tax payable by him, the amount of tax shown on such statement :
Provided that, where such person is not a resident person, he shall not be entitled to deduct, from the tax payable by him, the advance company tax shown on such statement.
Where for any year of assessment the assessable income of a person other than a company includes a dividend from a resident company in the form of shares or debentures, he shall be entitled to deduct from the tax payable by him, an amount equal to an amount which the company would have been entitled under subsection (1) to deduct as tax on such dividend had such dividend been paid in the form of money.