27.*
| (1) Subject to the provisions of subsection (2) and subsection (3), every resident company shall be entitled to deduct from the amount of any dividend payable to any shareholder in the form of money or an order to pay money out of the profits on which the taxable income of that company is computed for any year of assessment income tax equal to 33 1/3 per centum of such amount:[* The amendments made in section 27 by subsection (1) of section 18 of Act No. 18 of 1965 shall be deemed to have come into force on March 30, 1963-See section 18 (2) of Act No. 18 of 1965.] |
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| (2) The Commissioner may give notice in writing to a resident company requiring it to deduct from the amounts of dividends payable to a particular shareholder income tax on such amounts at a rate greater than 331/3 per centum but not greater than the highest rate at which tax is chargeable for such year of assessment on the taxable income of an individual; and where such notice is given, such company shall deduct from the amounts of all dividends payable during such year of assessment to such shareholder tax on such amounts at the rate specified in such notice; and such part of the tax required to be so deducted as exceeds 331/3 per centum of the amounts of such dividends shall be a debt due from such company to the Crown and shall be recoverable forthwith as such, or may be assessed and charged upon such company in addition to any income tax otherwise payable by it. |
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| (3) Where a resident company has obtained or is entitled to obtain relief in respect of double taxation under the provisions of section 70 or section 71, the rate at which such company may deduct tax from the dividends payable during any year of assessment shall be reduced as the Commissioner may direct. |
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| (4) Every person who issues a warrant, cheque or other order drawn or made in payment of any dividend which becomes payable by a resident company during any year of assessment shall annex thereto a statement in writing specifying-
| | (a) the gross amount which after deduction of income tax thereon corresponds to the net amount actually paid; | | |
| | (b) the sum deducted as income tax; | | |
| | (c) the net mount actually paid; | | |
| | (d) where any such dividend includes any part of the amount of a dividend received by that company from any other resident company, the part of the amount of the dividend so received and whether such other resident company is or is not a company whose profits and income are exempt from income tax by virtue of subsection (2) of section 6; and | | |
| | (e) where any such dividend includes any part of the amount of a dividend received by that company from any non-resident company referred to in subsection (2a) of section 25, the part of the amount of the dividend so received. | | |
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| (5) Where the statement referred to in subsection (4) discloses that a shareholder of a resident company received a dividend which included the amount of any dividend received from any other resident company or from any non-resident company referred to in sub-section (2a) of section 25, then that amount shall, for the purposes of determining the statutory income of such shareholder, be increased by fifty per centum and he shall be entitled to a set-off against the tax payable by him of an amount equal to the said fifty per centum: |
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| (6) Where the assessable income of a person other than a company includes a dividend from a resident company in the form of money or of an order to pay money, he shall be entitled, on production of a statement relating to such dividend made in accordance with subsection (4), to a set-off against the tax payable by him of the amount of tax shown on such statement: |
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| (7) Where for any year of assessment the assessable income of a person other than a company includes a dividend from a resident company in the form of shares or debentures, he shall be entitled to a set-off, against the tax payable by him, of an amount equal to that which the company is entitled under subsection (1) to deduct as tax on such dividend. |
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| (8) Where the assessable income of a person other than a company includes a dividend from a company which, although not resident in Ceylon, has paid Ceylon income tax on any part of its profits, he shall be entitled to a set-off of tax in respect of a similar part of the dividend, the amount of which shall be decided by the Commissioner. |
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Sri Lanka Consolidated Acts