ECONOMYNEXT — The cabinet of ministers has approved a proposal by the minister of finance to sign a convention between the governments of Sri Lanka and Austria for the prevention of double taxation and evasion and avoidance of public finance in respect of tax on income and capital.
A statement from the government information department said the convention has been drafted and signed at the official level after discussion with the tax authorities of the two countries. According to the said convention, the statement said, in terms of the convention that has been entered into by Sri Lanka recently for the prevention of double taxation, the tax amount at a rate not exceeding 10 percent of the gross amount will be charged for interest and goodwill.
“Accordingly, the Cabinet of Ministers has approved the proposal presented the President in his capacity as a Minister of Finance, Economic Stabilisation, and National Policy to sign for the said convention at the government level and to submit the convention and accord that will be signed, as per the provisions of the Inland Revenue Act No. 24 of 2017.”
According to the Inland Revenue Department (IRD), countries enter into Double Tax Treaties to eliminate or mitigate the incidence of juridical double taxation and avoidance of fiscal evasion in the international trade (or transactions).
“These treaties are particularly important for developing countries as they play a great role in attracting foreign investments, expertise, modern technology, etc,” the IRD website says.
As of January 2024, Sri Lanka had signed such treaties with 46 countries. A multilateral treaty with South Asian Association for Regional Cooperation (SAARC) was signed in 2005. (Colombo/Sep03/2024)