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Furnishing of Tax Clearance Certificate to Commercial Banks and Authorized Dealers

When outward remittances are made by commercial banks or authorized dealers, they are expected to ensure that the remittances are made in compliance with the tax laws. therefore, you are kindly requested to obtain a Tax Clearance Certificate with regard to remittances mentioned in Part B and forward the same to the respective Bank or Authorized Dealer in order to remit your money.

 

Part A

A clearance certificate is not required in relation to following remittances.

  1. Remittance of sale proceeds of quoted shares owned by non-residents in companies resident in Sri Lanka.
  2. Remittance of dividend paid to non-resident shareholders by resident companies.
  3. Foreign investments by residents of Sri Lanka.
  4. Transportation expenses in relation to freight forwarding, courier services and airline services involving the carriage of passengers and goods.
  5. Payments to expatriate employees which include wages, salaries and other benefits which has been subjected to tax under the PAYF, scheme.
  6. Remittances by export companies in respect of services in relation to advertising and marketing performed outside Sri Lanka.
  7. Remittances by export companies in respect of registration ol trademarks and other legal charges in lieu of such registration incurred outside Sri Lanka.
  8. Remittances in relation to annual subscription for membership of professional bodies, journals, magazines and other publication.

 

Part B

A clearance certificate from the Commissioner General of Inland Revenue is required for the following remittances.

  1. Communication services, which includes telecommunication and internet services
  2. Computer software and information services
  3. Royalties, license and franchise fees
  4. Remittance in respect of foreign loans, capital repayment and interest payments, if such loan has been obtained prior to 01.04.2012.
  5. Remittances to foreign contractors engaged in public and private sector services in Sri Lanka which include design, construction and installation of projects.
    1. Contract payments
    2. Surplus Funds arising from the contracts & projects.
  6. Remittances in respect of services rendered by persons outside Sri Lanka in relation to management services
  7. Remittances on service contracts, which include Human Resources Management and Information Technology Management

 

To obtain the clearance certificate, it is necessary to submit the following documents:

  • Letter of request including the details of sender / receiver, amount of the remittance, and the purpose
  • Copy of the invoice
  • A copy of the agreement and/or any other proof to enable the officers to verify the transaction in relation to the outward remittance

Clearance Certificate will be issued within 24 hours by the International Unit subject to the provision of necessary documents.

If you need more details, please contact to The Commissioner, International Unit 10th floor,  Department of Inland Revenue Colombo 2 or call 0112 135030

Payment of Income Tax

IT is payable on self assessment basis in five installments.

1st Installment - on or before the 15th day of the month of August that relevant year

2nd Installment - on or before the 15th day of the month of November that relevant year

3rd Installment - on or before the 15th day of the month of February that next year

4th Installment - on or before the 15th day of the month of May that next year

Final Payment - on or before the 30th day of the month of September that next year

Discount on Income Tax payable by Individuals
Any individuals who makes any quarterly self-assessment income tax payment, one month before the due date, is entitled to a 10% discount thereon (not exceeding such percentage on the instalment based on the current year profits).

10% of Gold Tax

Sri Lanka announced a 10 percent tax on gold imports Friday 21 June 2013 in what observers said was a bid to curb smuggling to India as global markets trading in the precious metal reported sharp price drops to 2010 levels.

Earlier this week India -- the world's largest consumer of gold -- hiked import duty on the precious metal to eight percent to stem surging demand and reduce the country's ballooning current account deficit, as consumers sought to exploit the fall in prices.

Sri Lanka's Central Bank last week said the island had seen a marked increase in gold imports during the second quarter of this year.  $150 million worth of gold was imported by the end of May this year compared with a total $100 million worth of imports during all of 2012.

Tax appealing Procedure

When you want to make an appeal to tax commission of Sri lanka, there are certain rules to be followed.these Rules may be cited as the Tax Appeals Rules, 2012 which is gazetted by an extra ordinary gazette No. NO. 1760/4 - MONDAY, MAY 28, 2012

(a) An appeal to the Commission under the Act, shall be made in the form of a petition.

(b) A petition shall contain the following particulars

(i) name and address of the petitioner ;

(ii) Tax File Number ITax Payers Identification Number ;

(iii) Commissioner-General's Determination Number and Date ;

(iv) the nature or the type of the tax involved ;

(v) Assessment NumberICharge Number and Date ;

(vi) the total tadcharge, as determined by the Commissioner-General and the penalty imposed ;

(vii) a plain and concise statement of the grounds or reasons on which the appeal is being made and such statement to be set forth in duly numbered paragraphs ;

(viii) the relief claimed ; and (ii) the name and address of an authorized representative, if any. 

Please visit the gazette for further details here - LINK