Inland Revenue (Amendment) Act 2013 · As enacted
26. Insertion of new section 104A in the principal enactment
Official English translation. The Sinhala text prevails.
Official translationFrom Department of Government Printing, unchanged
The following new section is hereby inserted immediately after section 104 of the principal enactment and shall have effect as section 104A of that enactment:-
104A. (1) Any profits and income arising, derived or accruing from, or any loss incurred in any transaction, other than transactions referred to in subsection (1) of section 104, entered into between two associated undertakings shall be ascertained having regard to the arm’s length price.
Where it appears to an Assessor that the profits and income or the loss referred to in subsection (1), has not been ascertained having
“Profits and income or loss from transactions between associated undertakings to be determined having regard to the arm’s length price.
regard to the arm’s length price, he may, in writing addressed to the person who carries on either the one or the other or both of the two associated undertakings referred to in subsection (1), require him to prove to the satisfaction of the Assessor, that such profits and income or such loss, as the case may be, has in fact been ascertained having regard to the arm’s length price. Where such person fails to so prove, the Assessor may estimate the amount of the profit and income or the loss, as the case may be, referred to in subsection (1), and make an assessment accordingly.
The arm’s length price referred to in subsection (1) shall be determined on the basis of any one or more of the methods, prescribed for that purpose.
For the purposes of this section-
an undertaking shall be deemed to be an associated undertaking of another undertaking, if the first-mentioned undertaking participates directly or indirectly or through one or more intermediaries, in the control of the second-mentioned undertaking in such manner or to such extent as may be prescribed;
“arm’s length price” means a price which is applied in uncontrolled conditions in a transaction between persons other than associated undertakings.”.