ECONOMYNEXT – Sri Lanka’s leasing companies will no longer be able to claim capital allowances on leased assets for tax purposes, under a new income tax law that will come into effect next year, a tax expert said.
Shamila Jayasekera, Partner-Tax at accounting firm KPMG, said the tax treatment of leases will be the same as bank loans in the future.
Leasing companies were earlier able to claim capital allowances on assets such as vehicles leased to a customer, which becomes an expense of the leasing company, reducing their tax liability.
Leasing companies own the assets, until they are transferred to the customer at a nominal price at the end of the term. (Colombo/Sept11/2017)