PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF …

1 PARLIAMENT OF THE DEMOCRATICSOCIALIST REPUBLIC OFSRI LANKAPRINTED AT THE DEPARTMENT OF GOVERNMENT PRINTING, SRI LANKATO BE PURCHASED AT THE GOVERNMENT PUBLICATIONS BUREAU, COLOMBO 5 Price : Rs. : Rs. as a Supplement to Part II of the Gazette of the DemocraticSocialist REPUBLIC of Sri Lanka of May13, 2021 This Act can be downloaded from on the Order of Government[Certified on 13th of May, 2021]ACT, No. 10 OF 2021 inland REVENUE (AMENDMENT)1 inland Revenue (Amendment)Act, No. 10 of 2021[Certified on 13th of May, 2021] O. 10/2020AN ACT TO AMEND THE inland REVENUE ACT, NO.

2 24 OF 2017BE it enacted by the PARLIAMENT of the DEMOCRATIC SocialistRepublic of Sri Lanka as follows: -1.(1) This Act may be cited as the inland Revenue(Amendment) Act, No. 10 of 2021.(2) The provisions of this Act (other than the provisionsof sections referred to in Table A and Table B set out inthis Amendment Act) shall commence on the date on whichthe certificate of the Speaker is endorsed thereon.(3) The provisions of sections referred to in Table A setout in this Amendment Act shall be deemed to have comeinto operation on April 1, 2021.

3 (4) The provisions of sections referred to in Table B setout in this Amendment Act shall be deemed to have comeinto operation on the respective dates specified in that 5 of the inland Revenue Act, No. 24 of 2017(hereinafter referred to as the principal enactment ) is herebyamended in subsection (3) of that section as follows: -(1) in paragraph (c) of that subsection, by thesubstitution for the words on equal terms; of thewords in the same grade of the service, on equalterms; ;(2) in paragraph (f) of that subsection, by thesubstitution for the words provident or savingsfund or savings society of the words provident,gratuity or savings fund or savings society.

4 Short title andthe date ofoperationAmendment ofsection 5 of Act,No. 24 of 20172 inland Revenue (Amendment)Act, No. 10 of 6 of the principal enactment is herebyamended in paragraph (d) of subsection (2) of that section,by the substitution for the words the Second or FourthSchedule to this Act , of the words the Fourth Schedule tothis Act .4. Section 9 of the principal enactment is herebyamended in subsection (3) of that section, by the substitutionfor the words commencement of this Act. of the words andfigures, commencement of this Act or for any projectsapproved under the Strategic Development Projects Act,No.

5 14 of 2008.. 10 of the principal enactment is herebyamended in subparagraph (v) of paragraph (b) of subsection(1) of that section, by the substitution for the words provident or savings fund of the words provident, gratuityor savings fund . 11 of the principal enactment is herebyamended by the addition immediately after subsection (3)of that section, of the following new subsection: - (4) For the purpose of this section, cost of fundsof the financial institution incurred on the loansprovided for new businesses commenced on or afterApril 1, 2021 by any individual after successfulcompletion of vocational education from anyVocational Education Institution which is standardizedunder Technical and Vocational Education andTraining concept (TVET concept)

6 And regulated bythe Tertiary and Vocational Education Commission,shall be deemed to be incurred in the production ofincome of such financial institution.. 14 of the principal enactment is herebyamended as follows: -(1) in subsection (2) of that section-Amendment ofsection 6 of theprincipalenactmentAmendment ofsection 9 of theprincipalenactmentAmendment ofsection 10 of theprincipalenactmentAmendment ofsection 11 of theprincipalenactmentAmendment ofsection 14 of theprincipalenactment3 inland Revenue (Amendment)Act, No.

7 10 of 2021(a) by the substitution for the words and thefigure The deductions referred to insubsection (1) granted for a year ofassessment , of the words and figures Thedeductions of improvements referred to insubsection (1) granted for any year ofassessment commencing from April 1, 2021 ;and(b) in subparagraph (i) of paragraph (a) of thatsubsection, by the substitution for the words in the case of repair or improvement to , ofthe words in the case of improvement to ;(2) in subsection (3) of that section, by the substitutionfor the words and figure (paragraph (3) of theFourth Schedule) , of the words and figure (paragraph 3 of the Fourth Schedule).

8 (3) by the addition immediately after subsection (3) ofthat section, of the following new subsection: - (4) In this section, improvement meansthe expenditure incurred by a person to makeadditions or alterations to a depreciable assetwhich enhances the value of such asset, butexcludes the expenditure incurred to maintainor repair a depreciable asset whichtemporarily enhances the value of such asset.. following new section is hereby insertedimmediately after section 15 of the principal enactment,and shall have effect as section 15A of that enactment: -15A.

9 (1) For any year of assessmentcommencing on or after April 1, 2021, incalculating a person s income from a business,marketing and communication expensesincurred by such person in the production ofInsertion of newsection 15A inthe principalenactment Marketingandcommunicationexpenses4 inland Revenue (Amendment)Act, No. 10 of 2021income during the year of assessment shall bededucted irrespective of whether they are of acapital nature or not.(2) In this section, marketing andcommunication expenses means, anyexpenses incurred by any person in-(a)carrying out a market research bysuch person or any institution in SriLanka on his behalf;(b)the development or production ofmarketing, advertising andcommunication campaign to theextent that such development orproduction is carried out in SriLanka;(c)advertising on mainstream media orsocial media including television,radio, print or as outdoor advertising.

10 (d)product launches or campaignactivation carried out by such personor by any local institution on hisbehalf;(e)development and printing of point-of-sale material by such person orby any local institution on hisbehalf.. 16 of the principal enactment is herebyamended as follows: -(1) in paragraph (b) of subsection (2) of that section,by the substitution for the words the Second orAmendment ofsection 16 of theprincipalenactment5 inland Revenue (Amendment)Act, No. 10 of 2021 Fourth Schedule to this Act. of the words theSecond, Fourth or Sixth Schedule to this Act.