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Sri Lanka: Tax relief measures (COVID-19)

Sri Lanka: Tax relief measures (COVID-19)

The Department of Inland Revenue in April 2020 issued a release reflecting tax amendments to the New Inland Revenue Act, 24 of 2017. There are also tax relief measures in response to the coronarivus (COVID-19) pandemic.

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According to the Inland Revenue release [PDF 444 KB], the tax changes include adjustments to the tax rates applicable for companies and individual taxpayers, as well as changes to the rules regarding withholding tax. The changes generally have an effective date of 1 January 2020.
 

Tax relief related to COVID-19

Withholding tax, extension of payment deadline: The Inland Revenue Department announced that withholding agents and taxpayers subject to withholding who are liable to make tax payments for the month of February 2020 that were due 15 March 2020 and payments for the month of March 2020 that were due 15 April 2020 are allowed until 30 April 2020 to make these payments without being subject to interest or penalties.

Stamp tax, extension of deadlines: Certain persons are permitted to file returns and make payments of stamp tax by 30 April 2020 (instead of 15 April 2020) for the quarter ending March 31, 2020, on or before April 15, 2020. Eligible persons include:

  • Any person issuing insurance policies
  • Any authority issuing licenses
  • Any service provider, on the presentation of a claim, demand or request for the payment of any money on the use of a credit card
  • Any employer employing more than 100 persons accepting receipts for payments made to the employees
  • Any other person issuing any other instrument of a category, having regard to the impracticability or inexpediency of stamping instruments of such category, at the time and in the manner prescribed

Value added tax (VAT), extension of deadlines and validity periods: Payments of VAT for the months of February and March 2020 are extended to a new due date of 30 April 2020. A similar extension applies for VAT returns. Furthermore, the period of validity of the extension letters (scheduled to expire before 30 April 2020) issued with regard to credit vouchers due against the VAT deferred under deferment facility are extended by one month from the expiration date. The period for any temporary VAT registration scheduled to expire before 30 April 2020 has been extended until 30 April 2020. 

Extension of time, transfer pricing disclosure form: The period of time for submitting transfer pricing disclosure form is extended to 30 April 2020.


Read an April 2020 report prepared by KPMG International 

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