10. The following new sections are hereby inserted sections 21A and immediately after section 21G, of the principal enactment principal" and shall have effect as a sections 21H and 21I of the principal enactment :"
| "21(H).
| | (1) The profits and income with the meaning of paragraph (a) of section 3 (other than profits and income from the sale of any capital asset within the meaning of paragraph (b) of subsection (7) of section 23) of any venture capital company shall be exempt from income tax for a period of five years commencing from the year of assessment in which the company commences to carry on commercial operations, where such company invests a sum of money as specified in subsection (2), which investment shall be identified as a specific investment, for the purchase of ordinary shares in a company engaged in-
| | | (i) a project which is of a pioneering nature and the operation of which results in value addition and the promotion of economic development: |
| (ii) a project which is engaged in the business of information technology ; |
| (iii) a project which is connected to the rehabilitation of non-performing or under performing industries within the meaning of section 21E ; or |
| (iv) any other project as may be specified by the Minister by Order published in the Gazette. |
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| | (2) In order to qualify for the tax exemption provided for in subsection (1), the venture capital company shall have invested a sum-
| | | (i) not less than forty per centum of the total equity capital of such company during the second year from the year in which such company commenced its commercial operations, on or before the end of that second year ; |
| (ii) not less than eighty per centum of the total equity capital of such company during the third year from the year in which such company commenced its commercial operations, on or before the end of that third year ; |
| (iii) not less than eighty per centum of the total equity capital of such company during the fourth and fifth years from the year of commencement of commercial operations, on or before the end of such fourth and fifth years respectively. |
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| | (3) Investments may be made in foreign companies, and such investments shall be considered as a specific investment for the purpose of this section, in the second year and thereafter where such investment is not more than ten per centum of equity capital of such company during the second year and not more than twenty per centum of equity capital of such company during the third year and subsequent year respectively, from the year in which such company commences its commercial operations. | | |
| | (4). During the first three years include in which such company commences its commercial operations any equity capital in excess of the minimum investments required by the subsection (2) may be invested in Government securities and such investment shall be considered as specific investment. | | |
| | (5) For the purposes of this section "a venture capital company'" means any company registered under the Companies Act, No. 17 of 1982 with a minimum issued share capital of rupees one hundred million and which is engaged in the business of providing equity investment in relation to any project as is specified in subsections (1), (2), (3) and (4) ; and"
| | | (i) which has entered into a Technical Service Agreement a management company possessing the required experience in the relevant area of investment ; or |
| (ii) which has in its employment, professional staff who have been trained by foreign venture capital companies and other local staff possessing the required professional venture capital management experience. |
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| | (6) The year of commencement of commercial operations for the purpose of this section, shall be the year in which the issued equity capital of the venture capital company has reached rupees one hundred million and shall not apply in respect of commercial operations commencing on or after April 1, 2008. | | |
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| 21I .
| | (1) the profits and income within the meaning of paragraph (a) of section 3 (other than any profits and income from the sale of capital assets)of any person engaged in business as specified in section 2 shall be exempt from income tax, for a period of three years commencing from the year of assessment in which such person commences to make profits in such business or any year of assessment not later than two years reckoned from the date of commencement of commercial operation, which ever is earlier. | | |
| | (2) The provisions of subsection (1) shall apply to any person registered with the Ceylon Tourist Board established by the Ceylon Tourist Board Act, No, 10 of 1966 on or after April 1, 2003 under the scheme for providing accommodation to tourist in Manor Houses or Thematic Bungalows for a period of ten years from the date of registration.". | | |
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Sri Lanka Consolidated Acts