A Sri Lanka-US taxation treaty kicked in on Monday, harmonising joint tax laws and allowing for tax credit and concessions for investors in both countries.
Representatives of both governments exchanged Instruments of Ratification for the Convention of Avoidance of Double Taxation and Prevention of Fiscal Evasion, on Monday.rn
rnThe proposed Treaty will relieve Double Taxation both in the United States and Sri Lanka through the Foreign Tax Credit Mechanism. rn
rnIt provides for reduced rates of taxation with investors from both countries entitled to tax credit in respect of the tax paid in the host country against taxes payable in their home country, a Treasury statement said Monday.rn
rnIt will also provide for non-discriminatory (tax) treatment by one country to residents and nationals of the other, and is useful in harmonizing tax laws of the host country with those of foreign investors. rn
rnFurther, the Treaty includes an exchange of information provisions that generally follows the