Income Tax Return Sri Lanka

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Income tax return Sri Lanka

All companies have to submit income tax return Sri Lanka as rules of IR (Inland Revenue), 2006 that act has been amended in several times as 2007, 2008, 2009, 2011, 2012, 2013 and 2014. Tax is applicable on profit or revenue of person or corporation. Tax source from below income:

1 Profit of service holder
2 Corporate annual income
3 Declaration of dividend
4 Lottery
5 Profit from business
6 Miscellaneous charge
7 Rent and royalty
8 Income from person
9 Donation of non government organization

Income Tax can pay upon installment basis as chart

Installment Payment date
1st By 15th August of that year
2nd By 15th November of current year
3rd By 15th February of current year
4th By 15th May of present year
5th By 30th September of following year

Corporate income tax filing

Business category Tax Rate
Tobacco 28 percent
Dividend of company 10 percent
Consideration of dividend 15 percent
Remittance from foreign companies 10 percent
Relocation global HQ Exemption
Royalty on international goods Exemption
As special rates of Sri Lanka Inland Revenue
Production company and service provider company those annual income is below Rs. 500,000,000 12 percent
Public listing company 14 percent
Service to foreign company 12 percent
Subsidiary, holding, associate company, group of company IF profit not over of Rs. 5000,000. 12 percent
Profit from Offshore currency in banking
Income cross of Rs. 5000,000 28 percent
Income less than Rs. 5000,000 12 percent
Agriculture, manufacture of beast food, promotion tourist 12 percent
Storage facilities and software development business
Individual 10 percent
Corporate 10 percent
Education service provider
Individual 10 percent
Corporate 10 percent
Income from agriculture 10 percent
Charity 10 percent
Trustees 24 percent
Partners 24 percent
Value Added Tax (VAT)
General rate, Financial service company, wholesale & retail 11 percent
Tax Incentive

Tax Incentives in Sri Lanka

Income tax has been exempted in specific sectors on corporate tax, duty, VAT, airport development levy.

Tax incentive with any number of investment
Sector Tax exemption
Trade on fishing: Corporation that trade on fishing sectors including cutting, packing, sorting, sizing, cleaning 5 years tax exemption from inception of business.
Planting agro seeds 5 years tax exemption from inception of business
Cultivation of energy crops

Income Tax incentives for entrepreneurs and calculator

Category of business Investment figure (Rs as millions) Tax exemption (year)
Agriculture corporation More than 25 and less than fifty four
Services enterprises More than 25 and less than fifty four
Manufacture (medium size) More than fifty and less than 100 four
Agriculture (medium size) More than hundred and less than two hundred) five
Services (medium size) More than two hundred six
Manufacture (big size) More than 500, less than 700 seven
Agriculture (big size) More than three hundred and less than 500 six

In case of existing enterprises those investment capital is more than fifty millions may have opportunity of exemption subject to some conditions. More info @ BOI-Sri Lanka

Deduction of enterprises tax rate

Category Cut out after tax holiday
Agro Twelve % or, 10 percent
Produce 12 percent or, 28 percent
Info tech 10 percent
Structure Twelve %
Education 10 percent
Goods and services 12 percent
Energy 12 percent

During tax holiday time dividend tax is exempted for all types of enterprises. Franchise fees, royalties payment that is permissible by Board of Investment being foreign parties tax is exempted as under section of inland revenue 17 A and 16 D.

Sri Lanka-S & F Consulting Firm Limited

No. 8 2/1, Rodney Street, Cotta Road,
Colombo 08, Sri Lanka
Colombo 08
Sri Lanka
Phone: +601131234372


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