Applicability
Any person including individuals, companies, Funds, NGO’s, partnerships who has not disclosed any amount of taxable supply, income or asset which was required to be disclosed under laws related to income tax enacted in 1979, 2000, 2006 and 2017 (“IR Laws”) and Value Added Tax Act No. 14 of 2002, as amended (“VAT Act”) in respective returns for any taxable period ended on or prior to 31.03.2020, subject to the restrictions.
Qualification to Claim
Invest or deposit an amount equivalent to the undisclosed taxable supply, income or asset in the following investment, prior to 31.03.2022:
- If such person is able to immediately invest such amount:
- shares issued by a resident company;
- treasury bills or treasury bonds issued by the Central Bank on behalf of the Government of Sri Lanka;
- any quoted debt securities issued by a resident company in Sri Lanka; or
- any movable or immovable property in Sri Lanka,
- if such person is unable to immediately invest such amount available in cash whether in LKR or in foreign currency, deposit such amount in a bank account.
Timeline for claiming amnesty – 31.03.2022
Immunity Granted
Any person who meets the duties mentioned herein is entitled to enjoy the full immunity from liability to pay any tax, penalty or interest or from any investigation or prosecution;
- under the IR Laws for any to any year of assessment ending on or prior to 31.03.2020, in relation to the income or asset disclosed in the declaration;
- under the VAT Act, for any year of any period ending on or prior to 31.03.2020 in relation to the amount of taxable supplies, provided no such tax has been collected by the person.
Duties
- Tax on Voluntary Disclosure – pay a tax as follows, prior to making the disclosure;
- undisclosed taxable supply, income or assets other than immoveable/ moveable property – 1% on such amount, income or cost of the asset invested or deposited; or
- any immoveable or moveable property – 1% on the market value of such property on the date of the declaration.
- Disclosure
Upon making the investment or deposit as aforesaid and payment of tax on or prior to 31.03.2022, submission of a Declaration in prescribed form to the Commissioner General of Inland Revenue (“CGIR”) along with documentary proof on the ownership, date of acquisition and cost or market value of the asset, as prescribed under the guidelines issued in this regard.
Such declaration would be either accepted or rejected by the CGIR, within 30 days of receipt of declaration. In the event of rejection, reasons to be specified.
Restrictions/ Exclusions
- Any person who has already made such investment or deposits using such funds, prior to the Act came into operation is not eligible to use the aforementioned privileges.
- Above provision is not available for the following persons/ amounts;
- Any person in relation to whom any investigations or legal proceedings under the provisions of Prevention of Money Laundering Act No. 5 of 2006, Convention on the Suppression of Terrorist Financing Act No. 25 of 2005, Bribery Act and Conventions Against Illicit Traffic in Narcotic Drugs is pending, in relation to any undisclosed taxable supply, income or asset;
- any person who has been convicted of an offence under the provisions of any law mentioned above, in relation to any undisclosed taxable supply, income or asset; or
- any amount of undisclosed taxable supply, income or asset held by any person, in respect of which an assessment under the provisions of following laws has been made;
- IR Laws;
- VAT Act;
- Betting and Gaming Levy Act No. 40 of 1988;
- Finance Act No. 11 of 2002;
- Stamp Duty Act No. 43 of 1982; or
- Stamp Duty (Special Provisions) Act. No. 12 of 2006
