Sri Lanka Tax Agency Issues Circular on Advance Income Tax Deductions for Specific Deposit Payments

The Sri Lankan Inland Revenue Department Dec. 20 issued Circular No. SEC/2022/E/02, on guidelines for banks and financial institutions to withhold advance income tax (AIT) from payments of interest and discounts to deposit holders, which have a source in Sri Lanka. Topics covered include: 1) the 5 percent AIT rate; 2) applicability of DTAs to interest payments to non-residents; 3) exemptions for certain foreign currency accounts, special deposit accounts, and amounts derived by governments and diplomatic international organizations; 4) deducting AIT in the cases of gross interest and joint deposit-holders; 5) the timeframe for deducting AIT; 6) the deadlines for ...