Sri Lanka: Tax spared
The agreement provides for credit to be given for tax `spared’ (INTM161270 & 161280 ) in Sri Lanka under the provisions of Sri Lanka law set out in Article 21(2). In addition credit may also be given for tax `spared’ in Sri Lanka under the provisions of Sections 8(c), 11(b), as amended, 11(c), 15, 16A, 16B, 17A, 20(a), as amended, 20A, 22A, 22B, 22C, and 22D of the Sri Lanka Inland Revenue Act 1979.
Relief is, however, limited to tax `spared’ in Sri Lanka for a period of ten years in respect of any one source of income.
Where credit is claimed under Article 21(2), the claim must be supported by a statement from the Sri Lanka Inland Revenue confirming that the relief was granted on the grounds of the pioneering or import substitution nature of the business.
All amounts of `tax spared’ for which credit relief is given should be reported as mentioned at INTM161290.