Sri Lanka to tax unit trust income at the hands of beneficiaries
ECONOMYNEXT – Sri Lanka will tax earnings from unit trust or mutual funds at the hands of beneficiaries, under a new income tax law that will come into effect next year, an official said.
Income from unit trusts will be taxed at the rate of corporate income tax in the case of companies or individuals in the case of persons, Thanuja Perera, Tax Policy Advisor at the Ministry of Finance, told a forum organised by the Ceylon Chamber of Commerce.
Perera said Unit Trusts themselves will not be taxed. Such unit trusts should have ‘eligible investments’ such as financial instruments.
But taxes and withholding taxes on investments made by unit trusts will be charged. In the case of bank deposits, for example, withholding taxes would be charged, capital gains on shares will not be taxed. However, corporates will have to pay the balance tax on their income.
Unit Trusts where beneficiaries are not entitled to income will be taxed at 24 percent. Other unit trusts will be treated as companies and taxed at 28 percent.
(COLOMBO, September 11, 2017)