30. Insertion of new sub-chapter in the principal enactment

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

The following new sub-chapter is hereby inserted at the end of section 97A of the principal enactment :-

“L - PETROLEUM EXPLORATION AND

EXPLOITATION

97B. (1) Any person or partnership which has entered into an agreement as a contractor or sub-contractor under the Petroleum Resources Act,

No. 26 of 2003, shall, notwithstanding the provision of section 73 of this Act, be deemed to be resident in Sri Lanka during the tenure of such contract or sub contract as the case may be, for the purposes of this Act.

(2)

The turnover from exports and local sales of petroleum exploited under any

Petroleum Resources Agreement referred to in subsection (1), shall be determined on the basis of accepted commercial practices and be subject to any specific provisions in the

Petroleum Resources Agreements, entered into under the Petroleum Resources Act, No. 26 of 2003.

Ascertainment of profits and income from business of petroleum exploitation under a

Petroleum

Resources

Agreement.

Inland Revenue (Amendment)

(3)

The profits and income from the business of petroleum exploitation under any Petroleum

Resources Agreement referred to in subsection (1), shall be ascertained after allowing the following deductions in addition to other allowable expenses under the provisions of this

Act, provided that the same item of expenditure shall not be deducted more than once—

(a)

payments made to service sub-contractors for conducting petroleum operations ;

(b)

one hundred per centum of the cost of acquisition of any plant, machinery or equipment used for the recovery of petroleum resources in lieu of the allowance for depreciation or cost of renewal under setion 23. Any proceeds realized on the sale of such assets shall be considered as a receipt from such business ;

(c)

interest expenses ;

(d)

royalty paid on petroleum resources recovered under any Petroleum

Resources Agreement. However, this amount shall not be allowed as a deduction under section 29 ;

(e)

all expenses on the development and production of petroleum, including capital expenses where a deduction under paragraph (b) above has not been granted;

(f)

in the year of first commercial production, all costs incurred by any contractor in the exploration for unsuccessful wells in exploration blocks under any Petroleum Resources

Agreement, up to and including such year of first commercial production;

Inland Revenue (Amendment)

(g)

any costs incurred by any contractor in the exploration for unsucesful wells in exploration blocs under any Petroleim

Resources Agreement in any year of assessment, after the first commercial production.”.

Read on from s 31