Lanka-Austria to avoid double taxation

Anjana SAMARASINGHE

Negotiations for entering into a bilateral treaty between Sri Lanka and Austria for the avoidance of double taxation and prevention of fiscal evasion concluded last week.

DIRECTOR GENERAL International Tax and Customs Department Federal Ministry of Finance Austria Dr Wolfgang Nolz said this initiative would boost bilateral trade between Austria and Sri Lanka.

Commissioner General of Department of Inland Revenue A.A. Wijepala said negotiations on a Double Tax Avoidance convention are considered to be an important step in the process to give particular focus to the bilateral economic relationship between the two countries.

After having necessary approval from the Cabinet and the Parliament Sri Lanka could enter into the agreement with Austria.

Sri Lanka has Double Taxation Avoidance agreements with 36 countries. Saudi Arabia, Croatia and Afghanistan too are keen on having Double Taxation Avoidance agreements with Sri Lanka to facilitate bilateral trade.

“Foreign investors need to pay taxes to Sri Lanka as well as their respective countries but under this agreement, it will prevent investors from paying double taxation.

“Many investors from Austria are keen on investing in Sri Lanka specially in infrastructure development. Some Austrian investments are approved by the BOI and these investments are in electrical goods manufacturing, leisure sector, metal and machinery. This agreement will boost investment from Austria, he said.

Meanwhile, the Department of Inland Revenue was able to collect Rs 203 billion during the first eight months of this year. Income tax accounted at Rs. 75 billion while VAT and other indirect taxes were recorded at Rs. 128 billion during this period.

Wijepala said the total revenue through direct taxes surpassed the total revenue from indirect taxes last month. In August direct taxes recorded as Rs. 16,162 million and indirect taxes was Rs. 16,062 million.

Talking about VAT refunds Wijepala said the Department has refunded Rs. 7,000 million during the first eight months as VAT refunds. VAT refund is now under control and there are fewer complaints on delays of refunds, he said.