an overview of tax administration in sri lanka taxes.pdflegislation act no. 9 of 2009 effective from...
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Mahesh Ranawaka
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Nation Building Tax (NBT)
Economic Service Charges ( ESC)
Stamp Duty
Withholding Tax (WHT)
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Scope …..
Payable by every person (company, body
of person , dealer or Partnership and
individual) who…..
Imports of any article
Carries on the business of
Manufacture of any article
Providing a service of any
description
Wholesale and Retail of any
article(w. e .f 01/01/2011)
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Legislation
Act No. 9 of 2009
Effective from 1st of February2009
Amendment Act. No. 32 of 2009
Amendment Act. No. 10 of 2011
Amendment Act. No. 09 of 2012
Amendment Act No. 11 of 2013
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Chargeability
Every liable person whose liable turnover
for any quarter exceeds
(i) Rs.3,000,000 per qtr from 01.01.2012
for
Manufacturers, Service providers,
Whole Sellers & Retail Sales traders
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Chargeability Cont..
From 01.01.2011
Operating a Hotel, Guest house,
Restaurant or other similar business,
Supply of Labour (manpower),Providing
Educational services, etc... Turnover
Exceeds 25 Mn for a Quarter
Wholesale & Retail - 50% out of the liable
turnover
Distributors - 25% out of the liable
turnover
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Calculation of NBT
Liable Turnover * 2% xxx
Less:
Tax Credits xxx
Tax Payable xxx
Less:
Installments payable xxx
Unabsorbed tax credit xxx xxx
Balance Tax Payable xxx
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Liable Turnover
In the case of manufacturer, service
provider , Dealer or Buying & Seller
proceeds receivable whether received
or not
Other than
Bad debts, VAT and Excise Duty
In the case of importer
the value of any article ascertained
under section 6 of the Value Added Tax
Act for the purpose of importation.
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Tax Rates
● 1% - 01/02/2009 - 30/04/2009
● 3 % - From 01/05/2009 - 31/12/2010
● 1.5% - Concessionary Rate From
01/07/2009 to 31/12/2010 (Only
for local rice production)
● 2% - 01/01/2011 for all sectors
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Credit for NBT
Only for Manufacturers
◦ Article imported
◦ Article purchased from the registeredmanufacturer
◦Whole Sale / Retail, Service providers arenot entitled for any credit for NBT paid by
them.
Refund
◦ No refund will be made to any registeredperson but excess payment can be
carried forward for setting off.
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VAT Act Section 06
CIF value + Customs Duty + CESS +
PAL + S. Excise any other duty
payable to customs + 10% of the CIF
value (mark up)
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NBT Calculation
1. 100 - 2% = 2
2. 100
2
102 X 2% = 2.04
3. 100
2.04
102.04 X 2% = 2.0408
100 X 2 % = 2.04
98
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Return & Payment
Return
submit on 20th dates of the month
immediately succeeding the end of the
relevant quarter.
(Quarterly Basis)
Payment
Self payment on first two months and
balance payment have to be paid on 20th
date of the month immediately succeeding
the end of the relevant quarter.
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Adjustment for Income Tax
Gazette No. 1606/31 dated 09/06/2009
Y. A 08/09 No adjustment
09/10 2/3 payable not
allowed
(w.e.f. 1/05/2009)
10/11 2/3 payable for first 09
month not allowed
11/12 Fully allowed
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Charge based on Turnover of the
business from 2006/07 on ward
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Legislation
Economic Service Charge (ESC) Act
No. 13 of 2006 &
Economic Service Charge
Amendment Acts
No. 15 of 2007
No. 11 of 2008
No. 16 of 2009
No. 11 of 2011
No. 06 of 2013
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Liability of ESC
Tax should be paid on liable turnover.
Liable threshold for ESC is Rs.50Mn
per Quarter.
Tax Rate is 0.5% of the turnover.
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Calculation of Tax
= Liable Turnover * 0.5%
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Liable Turnover For ESC
The amount receivable, whether actually
received or not from every transaction
entered into within the relevant quarter
with regard to the trade, business,
profession or vocation carried
after deducting the following amount.
VAT included in the turnover
Proceeds of the sale of capital assets.
Bad debts (bad debt recoveries shall taken)
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Payments & Returns of ESC
Payments,
1st Quarter – 20th July
2nd Quarter – 20th October
3rd Quarter – 20th January
4th Quarter – 20th April
Return,
Annual Return - 30th April
(Annual Basis)
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Exemption from ESC
The turnover from the following
businesses will be exempt from ESC.
◦ Distributors as defined in the ESC Act
◦ Dealers in Lottery
◦ Unit Trust or Mutual Fund
◦ All Air Lines & Shipping Lines
◦ Life Insurance Premium
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Sett off against Income Tax
Amount paid as ESC on the turnover
which can be set off against the
income tax liability within 5 years of
assessment
From the year of assessment in which
such ESC payment made
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Govr. was abolished in 2002 and
reintroduced in 2006.
Stamp Duty (Special Provision)Act No.12
of 2006 with effected on01.04.2006.
Tax charge by the Provincial Council,
Revenue authority.
If Assessor is opinion that an instrument
has not been duly stamped , he shall
issue a notice assessing the amount of
understated Stamp Duty
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Who shall pay……
Payable by,
In the case of a policy of Insurance,
person effecting the insurance.
In the case of a transfer or assignment of
any share, transferee or assignee of such
share.
In the Case of Leasing, Lessee.
In the case of claim, demand or request
by service provider of credit card, card
holder.
In all other cases, person drawing, making
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Stamp Duty…. Affidavit RS.25
Policy of Insurance Rs.o.50 for
each 1000
Notary Warrant Rs.1000
Credit Card Rs. 10 for
every 1000
Mortgage Rs.1 for every
1000
Issue, Transfer or Assignment of Rs. 5 for every
any shares 1000
Receipt or discharge given
◦ Up to Rs. 25,000 Exempt
◦ Above Rs. 25,000 Rs. 25
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PAYE on employment Benefit
PAYE on Director Fee
Rs. 25000 or below 10%
Rs. 25,000 or above 16%
10% on Rent Income
10% on Winning from Lottery (
Amount more than 500,000)
WHT on Interest Income