18. Amendment of section 61 of the principal enactment

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

Section 61 of the principal enactment is hereby amended as follows:—

(1)

in subsection (1) of that section:—

(a)

by the substitution for paragraph (b) of that subsection, of the following paragraph:—

“(b)

equal to:—

(i)

ten per centum of the relevant part of the aggregate amount of the gross dividends distributed by such company in that year of assessment, out of the profits for any year of assessment; and

(ii)

fifteen per centum of the excess of thirty three and one third per centum of the distributable profits of such company for the year of assessment immediately preceding that year of assessment,

(hereinafter in this paragraph referred to as the “preceding year”) over the aggregate of the gross dividends distributed by such company in such preceding year, where such company has in the preceding year distributed dividends less in amount than twenty five per centum of the distributable profits for that preceding year:

Provided that, where the

Commissioner-General is satisfied, that any company has been restrained from distributing or has set apart, the whole or any part of its distributable profits for any year of assessment in order to comply with any requirement imposed by any other written law, the whole or such part so restrained from being distributed or so set apart, shall be deemed to have been distributed, for the purposes of determining whether such company has distributed twenty five per centum of its distributable profits for that year of assessment.

In this paragraph—

“company”

does not include any unit trust or mutual fund;

“distributable profits” in relation to any year of assessment and to any company means, the book profits of that company for that year of assessment, reduced by the aggregate of—

(a)

the income tax payable by that company for that year of a s s e s s m e n t calculated in a c c o r d a n c e with paragraph (a);

(b)

the cost incurred by that company in that year of assessment in the acquisition of any land or any capital asset; and

(c)

any notional p r o f i t computed on the basis of a revaluation of any capital asset and included in such book profits, increased by the aggregate of the allowance for d e p r e c i a t i o n deducted in respect of such capital asset in calculating such book profits and any notional loss computed on the basis of a revaluation of any capital asset and included in such book profits;

“relevant part” in relation to the aggregate amount of the gross dividends distributed by any company, means the balance of such aggregate after deducting therefrom any dividend distributed:—

(a)

to any company or other body of person, who or which is exempt from income tax u n d e r paragraph (a)

or paragraph (c) of section 7;

(b)

to any unit trust or mutual fund;

(c)

to any shareholder who is exempt from income tax under section 10 in respect of such dividend; or

(d)

out of any d i v i d e n d received from a n o t h e r r e s i d e n t company;”;

(b)

in paragraph (ii) of the proviso to paragraph (c) of that subsection, by the substitution for the words from, “of such balance over such amount of such dividend.”, to the and of that paragraph, of the words “of such balance over such amount of such dividend.”;

(c)

by the repeal of paragraph (d) of that subsection; and

(2)

by the repeal of subsection (2) of that section and the substitution therefore of the following subsection:—

“(2) For the purposes of this section “gross dividends” in relation to any dividend distributed by any company, means the amount of the dividend before any deduction is made under section 65.”.

Read on from s 19