»Ê¹ÚÌåÓýapp

Sri Lanka tax is deducted from dividends paid by Sri Lanka companies (other than public limited companies) to non-residents at a rate of 25 per cent in accordance with Sri Lanka domestic law. »Ê¹ÚÌåÓýapp agreement does not reduce the rate except where a dividend is paid in respect of any `new contributionâ€� made by a United Kingdom company after 21 June 1979. »Ê¹ÚÌåÓýapp rate is then reduced to 15 per cent (Article 10(4)).

»Ê¹ÚÌåÓýapp reduction is not given if the dividend is effectively connected with (see INTM153110 fifth sub-paragraph) a business carried on through a permanent establishment which the recipient has in Sri Lanka. `New contributionâ€� is not defined in the agreement but can be taken generally to mean new investment. »Ê¹ÚÌåÓýapp Sri Lanka tax deducted from dividends qualifies for credit as a direct tax (see INTM164010 (c)).

Where a dividend is paid by a Sri Lanka company to a United Kingdom company controlling, directly or indirectly, at least 10 per cent of the voting power in the Sri Lanka company, credit is also due for the underlying tax (see INTM164010 (d)) (Article 21(1)(b)).