Income Tax (Amendment) Act (No. 4 of 1963)

Sri Lanka Consolidated Acts

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Income Tax (Amendment) Act (No. 4 of 1963) - Sect 30

Insertion of Chapter VIIIA in the principal enactment. [ 22, 13 of 1959.]

30. The following Chapter is hereby inserted immediately after section 57 of the principal enactment:

57A.

(1) In respect of any year of assessment commencing on or after April 1, 1958, -

(a) the rate or rates of the tax referred to in section 5, and

(b) the provisions of Chapter VII and the provisions of section 44 other than subsection (2) and subsection (5) of that section,

	(2) The provisions of subsection (2) of section 44 shall not apply to any resident company after April 30, 1959, and the provisions of subsection (5) of that section shall not apply to any person after March 31, 1960.

57B.

(1) In respect of any year of assessment commencing on or after April 1, 1958, the tax to which a company resident in Ceylon in the year preceding such year of assessment shall be liable shall consist of-

(a) a sum equal to 45 per centum of the taxable income of such company for such year of assessment, and

(b) a sum equal to 33J per centum of the aggregate amount of the gross dividends distributed by such company out of the profits on which the taxable income of such company is computed for such year of assessment:

(2) Where a dividend is paid by any resident company to another resident company and either-

(a) a deduction has been made under section 57D (1) in respect of that dividend by the first-mentioned company, or

(b) that dividend consists of any part of the amount of a dividend received by the first-mentioned company from another resident company,

	(3) In subsection (1), "amount of the gross dividends" of a company means the amount of the dividends before such deductions as the company is entitled to make under this Ordinance for tax are made from the dividends.

	(4) The provisions of paragraph (a) or paragraph (b) of subsection (1) may be amended by resolution of the House of Representatives.

57C.

(1) In respect of any year of assessment commencing on or after April 1, 1958, the tax to which a nonresident company shall be liable-

(a) shall, where there are remittances of such company in the year preceding such year of assessment, or, if the statutory income of such company is directed by the Commissioner under section 13 (2) to be computed up to some other day other than the thirty-first day of March as is specified in the direction, where there are remittances in the year ending on such specified day in the year preceding such year of assessment, consist of a sum equal to 45 per centum, and an additional 6 per centum, of the taxable income of such company for such year of assessment and a sum which shall, if the aggregate amount of such remittances is less than one-third of such taxable income, be equal to 331/3 per centum of such aggregate amount, and, if such aggregate amount is not less than one-third of such taxable income, be equal to 331/3 per centum of one-third of such taxable income ; and

(b) shall, where there are no such remittances, consist of a sum equal to 45 per centum, and an additional 6 per centum, of such taxable income.

(2) In subsection (1), "remittances ", with reference to a nonresident company, mean-

(a) sums remitted abroad out of the profits of that company, such sums not including any dividends paid by a resident company to such non-resident company if such resident company has made a deduction under subsection (1) of section 57d in respect of that dividend,

(b) such part of the proceeds of the sale abroad of products exported by that company as is retained abroad, and

(c) in respect of any products exported by that company and not sold in a wholesale market or not sold at all, such part of the profits deemed under section 38 to be derived from Ceylon as is retained abroad.

	(3) Where a dividend is paid by any resident company to any non-resident company and a deduction has been made under subsection (1) of section 57d in respect of that dividend by the resident company, that dividend shall, notwithstanding anything to the contrary in any other provision of this Ordinance, be deemed not to form part of the assessable income of the non-resident company.

	(4) The rates of the tax specified in subsection (1) may be amended by resolution of the House of Representatives.

57D

(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 of an order to pay money out of the profits on which the taxable income of that company is computed for any year of assessment commencing on or after April 1, 1959, tax equal to 331/3 per centum of such amount:

(2) The Commissioner may give notice in writing for any year of assessment commencing on or after April 1, 1959, to a resident company requiring it to deduct from the amounts' of dividends payable to a particular shareholder 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 tax otherwise payable by it.

	(3) Where a resident company has obtained or is entitled to obtain relief in respect of double taxation under the provisions of section 48 or section 49, the rate at which such company may deduct tax from the dividends payable during any year of assessment commencing on or after April 1, 1959, shall be reduced as the Commissioner may direct.

(4) Notwithstanding that the whole or any part of the amount of a dividend payable to any shareholder during any year is exempt from the tax by virtue of section 9, any deduction which may be made under the preceding provisions of this section shall be calculated on the total amount of the dividend; and where such deduction is made-

(a) if the whole of the amount of the dividend is exempt from tax, there shall be due from the company as a debt to the Crown the total sum actually deducted under such preceding provisions ; and

(b) if only a part of the amount of the dividend is exempt from the tax, there shall be due from the company as a debt to the Crown the difference between-

(5) Every person who issues a warrant, cheque or other order drawn or made in payment of any dividend in respect of which a deduction has been made under subsection (1) and which becomes payable by a resident company during any year of assessment shall annex thereto a statement in writing showing-

(a) the gross amount which after deduction of tax thereon corresponds to the net amount actually paid ;

(b) the sum deducted as tax ;

(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.

(5A) Where a statement referred to in subsection (5) discloses that a shareholder of a resident company received a dividend which included part of the amount of a dividend (other than a dividend referred to in section 8 (3) or section 9 (3A) ) received from any other resident company, then that part of such amount shall, for the purpose of determining the statutory income of such holder, be increased by fifty per centum and he shall be entitled to a set-off against the tax payable by him of an amount equivalent to the said fifty per centum.

	(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 (5), to a set-off against the tax payable by him of the amount of tax shown on such statement:

	(7) Where for any year of assessment commencing on or after April 1, 1960, the assessable income of a person 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.

	(8) Where the assessable income of a person 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-of 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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