Sri Lanka And Kuwait Sign Double Tax Treaty

by Robert Lee, Tax-News.com, London

07 February 2002

It was announced on Wednesday that Kuwait and Sri Lanka have signed an agreement to prevent double taxation on trade between the two countries.

The treaty, according to the Sri Lankan Commissioner General of Inland Revenue, B.T. Perera, includes provisions for taxation at reduced rates on interest, dividends, and royalties. It also provides for a complete tax sparing credit, which means that investors from either location will be given credit in their home country for taxes paid in the other country, even if in fact an exemption applies and the tax is not paid.

According to Mr Perera, complete exemption on airline profits has been given to the country of source, but shipping profits will be taxed in the country of source, subject to a 50% reduction.

The agreement, signed on Tuesday, also contains information exchange provisions in order to facilitate enforcement of the agreement, and to prevent tax evasion by individuals and organisations operating in both countries.

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