Financial Times

Sri Lankan expats encouraged to live and work here
Sri Lanka has changed its tax laws due to a number of Sri Lankans living abroad expressing interest to work in Sri Lanka and avail the country of their experience and knowledge, the National Council for Economic Development (NCED) said in a statement.

The former tax laws created a major problem as any person living and working in Sri Lanka for more than 182 days in any tax year was liable for taxation on their income in Sri Lanka as well as any income gained abroad. "This created a financially unviable situation as those people then had to pay tax on the income arising from abroad as well as income earned in Sri Lanka which meant paying tax twice on the same income as they would already be paying tax for the income earned in those countries. Unravelling this through provisions in double tax agreements was a hassle that most persons were averse to," the NCED said.

New amendments to the Income Tax Act have addressed this problem effectively. The new rule is that a Sri Lankan with dual nationality will only have to pay tax in Sri Lanka on income arising in Sri Lanka, regardless of the number of days he/she spends in Sri Lanka. "It is anticipated that this will result in many more Sri Lankans coming and working for their country while also considering investing their wealth in Sri Lanka," the statement said. A NCED spokesman said the move gives effect to a proposal made in the last November budget.

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