27.
| (1) Where any non resident company carrying on in Sri Lanka any trade or business incurs any expenditure in the nature of head office expenditure , there shall be deducted from the profits and income of such company for such year of assessment from such trade or business, a sum equal to the lesser of -
| | (a) the amount of such expenditure; or | | |
| | (b) the amount equal to ten per centum of such profits or income. | | |
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| (2) For the purpose of this section "head office expenditure" in relation to a non resident company and to any year of assessment, means the executive and general administration expenditure incurred by or on behalf of such company outside Sri Lanka, including expenditure -
| | (a) comprising the aggregate of the total profits from employment of and the total cost of travelling undertaken by every employee and every other person employed in or managing the affairs of any office of such company outside Sri Lanka ; and | | |
| | (b) in respect of -
| | | (i) any premises outside Sri Lanka ; and |
| (ii) such other matters connected with the executive and general administration as the case may be, determined by the Commissioner-General having regard to all the circumstances of the case, as being reasonable and commercially justifiable. |
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Sri Lanka Consolidated Acts