Sri Lanka to unveil massive incentives for large investments

investing

May 04, 2017 (LBO) – Sri Lanka’s proposed Inland Revenue Act plans to include investment incentives which provide massive depreciation allowances for investors.

The government said this depreciation allowance will be applicable for companies that incur expenses on depreciable assets other than intangible assets during a year based on the amount of investment, employment generation and the geographical location.

Accordingly, 150 percent depreciation allowance will be granted for investments with over 2,000 million US dollars and those investors also get 25 years for unrelieved losses.

Investments between 100 million and 2,000 million US dollars will get 150 percent depreciation allowance with 10 years to claim unrelieved losses.

Investments between 50 million and 100 million US dollars will get 100 percent depreciation allowance with 10 years to claim unrelieved losses.

Investments for port development with over 2,000 million US dollars will get 100 percent depreciation allowance with 25 years to claim unrelieved losses. No corporate tax will be applicable for them until the investment allowance is fully absorbed.

Two hundred percent depreciation allowance will be granted for investors bringing in investments in the range of three million US dollars for a period of three years for the Northern Province.

Hundred percent depreciation allowance will be provided for investments in other provinces in the range of three million US dollars for a period of 3 years.

The government has promised to bring this new legislation to Parliament by June, with fiscal consolidation reforms being part of an IMF support programme.