As enacted

Contents

7. Amendment of section 25 of the principal enactment

Official English translation. The Sinhala text prevails.

Section 25 of the principal enactment as last amended by Act, No. 8 of 2014 is hereby further amended as follows:–

(1)

in subsection (1) of that section-

(a)

by the repeal of sub-paragraph (v) and sub-paragraph (vi) of paragraph (a) of that subsection, and the substitution therefor, of the following sub-paragraph:–

“(v)

any qualified building constructed or any unit of a condominium property acquired and which is approved by the

Urban

Development

Authority established by the

Urban

Development Authority Law,

No. 41 of 1978 and constructed to be used as a commercial unit or any hotel building (including a hotel building complex) or any industrial building (including any industrial building complex) acquired from a person who had used such building in any trade or business-

(A)

prior to April 1, 2015 at the rate of six and two third per centum per annum, on the cost of construction or cost of acquisition of such building or unit; or

(B)

on or after April 1, 2015 at the rate of ten per centum per annum on the cost of construction or the cost of acquisition of such building or unit;”;

(b)

by the addition immediately after paragraph (g) of the proviso to paragraph (a) of that subsection, of the following new paragraph:–

“(h)

where any plant, machinery or equipment acquired and used on or after April 1, 2015, in any new undertaking commenced on or after April 1, 2015 for the manufacture of products for exports with an investment of not less than two million US Dollars or its equivalent in other currency and which is not formed by splitting up or re-construction of an existing undertaking, the rate of depreciation shall be hundred per centum of the cost of acquisition;”;

(c)

in the second proviso to paragraph (a) of that subsection, by the substitution for the words and figures “referred to in sub-paragraphs (i), (ii), (iii), or (iv)”, of the words and figures “referred to in sub-paragraph (i), (ii), (iii), (iv) or (v)”;

(d)

in the proviso to paragraph (i) of that subsection, by the insertion immediately after paragraph (B) of that proviso, of the following new paragraph:–

“(C)

where such expenditure on research is incurred on or after

April 1, 2015 , for any innovation or research relating to high value agricultural products and such research is carried out by such person himself or through any research institution, in Sri Lanka”;

(e)

by the insertion immediately after paragraph (i) of that subsection, of the following paragraph:–

“For the purpose of this paragraph the

Commissioner-General shall issue guidelines in order to ensure the uniform application of deduction;”;

(f)

by the substitution in sub-paragraph (iv)

to the proviso to paragraph (k) of that subsection for the words and figures

“under Chapter XIV or in the opinion”, of the words and figures “under Chapter XIV of this Act where such benefit is not exempt under paragraph (s) of subsection (1) of section 8 of this Act, or in the opinion”;

(g)

by the repeal of paragraph (w) of that subsection and the substitution therefor, of the following new paragraphs:-

“(w)

for any year of assessment commencing on or after April 1, 2014

any royalty or ground rent payable for the relevant year of assessment and paid by such person if such amount was not allowed to be deducted prior to April 1, 2014, under paragraph (a) of subsection (5) of section 32;

(x)

for any year of assessment commencing on or after April 1,

2015, an amount equal to three hundred per centum of the expenditure incurred by any person registered with the Tertiary and

Vocational Education Commission established under the Tertiary and

Vocational Educational Act, No. 20

of 1990 on standard skill development training by any institution recommended by such

Commission to be provided to trainees;

(y)

for any year of assessment commencing on or after April 1,

2015, an amount equal to three hundred per centum of the expenditure incurred by any person for brand promotion for the export of products manufactured by such persons.

For the purpose of this paragraph

“brand promotion” means, creating an internationally recognized brand name for a local value added product or produce.”;

(2)

in subsection (5) of that section, by the insertion at the end of the proviso to that subsection, of the following new paragraph :-

“For the purpose of this subsection “person”

includes a partnership.”;

(3)

in subsection (7) of that section-

(a)

by the substitution for the words in the definition of “capital assets” in paragraph (b) of that subsection for the words “

means any plant, machinery, fixture, fitting, utensils, articles or equipment”, of the words “means any plant, machinery, fixture, fitting, utensils, articles or equipment, including computer software or intangible assets other than goodwill,”;

(b)

by the repeal of sub-paragraph (iii) of paragraph (f) of that subsection, and the substitution therefor, of the following new sub-paragraph:-

“(iii)

where a company is incorporated

(hereinafter referred to as the “first mentioned company”) to -

(a)

take over the business

(including the capital assets) carried on by an individual either solely or in partnership with others, and acquires the capital assets of such business being carried on by such individual or partnership;

(b)

segregate the business of long term insurance and general insurance as separate businesses as required in terms of

Regulation of Insurance

Industry (Amendment)

Act, No. 3 of 2011 or to consolidate, acquire or merge of any bank, financial institution or leasing company under the guidance of the

Central Bank of Sri Lanka subject to conditions specified in the Guidelines issued by the

Commissioner General where such businesses are carried out separately prior to such segregation, consolidation, acquisition or merger, by each such company (hereinafter referred to as the “second mentioned company”), the cost of acquisition of each capital asset by the first mentioned company shall be deemed to be the cost of acquisition of such capital asset by such individual or partnership or the second mentioned company, reduced by the amount of any allowance for depreciation granted in respect of such asset to such individual or partnership or second mentioned company, and the date of acquisition of such capital assets by the first mentioned company, shall be deemed to be the date of acquisition of such capital asset by such individual, partnership or second mentioned company;”.

Read on from s 8