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Values for Non cash benefits

Department of Inland Revenue has published revised Values of non cash benefits for PAYE purposes. These are effective from 01.04.2018. Key Changes are given below
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Return of Income and installment payments for Y/A 2018/19

Return of Income Inland Revenue Act No. 24 of 2017 is effective from 01.04.2018 (i.e Y/A 2018/19).As per section 93 of Inland Revenue Act No. 24 of 2017, every person shall file a return of income...
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The benefit on vehicle(hired or operating lease) given to an employee for the purpose of exclusively use in private

"The value of benefit to an employee from the (fully or partly) private use of any motor vehicle should be the market value"If the company pays...
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Should every individual need to open an income tax file?

As per the provisions of the Inland Revenue Act No. 24 of 2017, every person who has a taxable income shall file a return of income.However, a resident individual who only has income from employment that...
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Special attention to the companies having undistributed dividend income

As per the transitional provisions published on 01st April 2018,In case of any dividend paid by any company prior to April 01, 2019, out of any such dividend received by that company from...
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The impact of non-availability of Direction procedure for Investment Returns

As per the Section 84 of the Inland Revenue Act No. 24 of 2017, interest, discounts , rent etc. are  subject to withholding tax at the rates given below.Investment ReturnWithholding...
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Impact of Withholding Tax (WHT) on Tuition industry.

As per the Section 85 of the Inland Revenue Act No.24 of 2017, Withholding Tax should be deducted from payment for  teaching , lecturing ,examining ,invigilating or supervising an examination   made...
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Consequences on non compliance with the provisions of withholding tax

Withholding agents are required to deduct relevant withholding taxes and remit to the Department of Inland Revenue in accordance with the provisions of the Inland Revenue Act. If any withholding...
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How to handle tax burden on interest

As per the Inland Revenue Act, No.24 of 2017, there is a restriction to deduct interest on borrowings when calculating taxable profit from a business.The restriction is that,if the business is a manufacturing entity, maximum...
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Authorized representatives to communicate with IRD

As per Section 115 of Inland Revenue Act No. 24 of 2017, the Commissioner-General of Inland Revenue has specified the circumstances under which a taxpayer may designate an authorized representative...
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A Special note on Withholding Tax

Based on Circular No.SEC/2018/06 dated 18.04.2018 issued by the Commissioner General of Inland Revenue, important points on withholding tax are given below.
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The reality of PAYE under the New Inland Revenue Act

Employees, those who were entitled only for salary up to Rs.425,000 (without travelling allowance) will be benefited from New IR Act and if salary exceeds Rs.425,000,higher PAYE tax needs to be paid compared...
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KEY CHANGES IN THE INLAND REVENUE ACT, NO 24 OF 2017

The provisions of the Inland Revenue Act, No 24 of 2017 shall effect from today onwards (1/4/2018).You may make sure whether you are aware following key changes.
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Gains and profits from the business of life Insurance

As per the section 67 of Inland Revenue Act No. 24 of 2017,Gains and profits from the business of life insurance is the aggregate of –Surplus distributed to share holders from the life insurance policy holders...
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New IR Act- key implications to petroleum operations

RESIDENT RULEAny individual or entity who or which has entered in to an agreement as a contractor or subcontractor under the Petroleum Resources Act, No. 26 of 2003 shall be deemed to be resident in Sri Lanka...
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Annual Liqour Licence Fees

Liquor licence fees has been revised w.e.f.01.01.2018.
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Time of realization of an asset

When a person parts with ownership of an asset, it shall be considered as realization of the asset.
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Realization of Capital Assets Vs Realization of Investment Assets

REALIZATION OF CAPITAL ASSETS                REALIZATION OF INVESTMENT ASSETS As per section 195,Capital Asset means,-land...
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Excise duty on certain vehicles has been reduced w.e.f. 23.11.2017.

As per the gazette notification No. 2046/14 dated 22.11.2017, with effect from 23.11.2017 the concessionary Excise Duty on following articles has been reduced to 30% of the payable duty.
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Deductibility of Losses

The basis of deducting losses under new Inland Revenue Act and old Act is described below.UNDER INLAND REVENUE ACT, NO 10 OF 2006 AND SUBSEQUENT AMENDMENTSUNDER INLAND REVENUE ACT, NO. 24  OF 2017 Business losses could be claimed,...
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Deduction of Finance Cost (Thin Capitalization Rule) Under New Inland Revenue Act

A company is typically financed (or capitalized) through a mixture of debt and equity capital. Thin capitalization refers to the situation in which a company is financed through...
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