52. Amendment of the Second Schedule to the principal enactment

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

The Second Schedule to the principal enactment is hereby amended as follows: -

(1)

in paragraph 1 of that Schedule-

(a)

in subparagraph (2), subparagraph (3) and subparagraph (4) of that paragraph, by the substitution for the words “total expenses incurred by that person during that year”, of the words “total investment made by that person” respectively;

Act, No. 10 of 2021

(b)

in subparagraph (6) of that paragraph, by the substitution for the words “shall be deferred”, of the words “shall not be deferred”;

(c)

by the repeal of subparagraph (9) of that paragraph, and the substitution therefor, of the following subparagraph: -

“Improvements on Leasehold Lands

(9)

Notwithstanding anything to the contrary in any other provision of this Act, for the purpose of this Schedule, any building, structure, or similar work of a permanent nature constructed or made in a leasehold land by the person who made the investment shall not be deemed as an intangible asset but deemed as a depreciable asset.”;

(2)

by the repeal of paragraph 2 of that Schedule, and the substitution therefor, of the following paragraph: -

“Exemption of Certain Dividends from

Withholding Tax

2. Notwithstanding anything in the

First Schedule, the rate of tax to be applied on a dividend paid by a company to a non-resident member prior to January 1, 2020 shall be zero, if the company paying the dividend has incurred more than USD 250 million on depreciable assets (other than intangible assets) in Sri Lanka, for the period in which that payment is made out of profits sheltered by enhanced capital allowances under this

Schedule.”;

(3)

by the repeal of paragraph 3 of that Schedule, and the substitution therefor of the following paragraph: -

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“Exemption of Employment Income

3. Notwithstanding anything in the

First Schedule, the rate of tax to be applied on employment income of an expatriate employee shall be zero, if the company making the payment has incurred more than USD 250

million on depreciable assets (other than intangible assets) in Sri Lanka, for the period in which that payment is made out of profits sheltered by enhanced capital allowances under this Schedule, or for five years from the commencement of commercial operations, whichever is higher, where the number of expatriate employees at any time during that period does not exceed twenty.”.

Read on from s 53