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Agreement with Turkey to avoid double taxation

31 Jan 2022

In a significant move aimed at expanding cross-border trade and investment, the Foreign Ministers of Sri Lanka and Turkey signed an Agreement on the Avoidance of Double Taxation (DTAA) during the latter’s visit to Sri Lanka, the Foreign Ministry announced yesterday (30). Double taxation is the levying of tax by two or more jurisdictions on the same income in the case of income taxes, asset in the case of capital taxes, or financial transaction in the case of sales taxes. Sri Lanka has entered into Double Taxation Avoidance Agreements with over 40 countries to eliminate or mitigate the incidence of juridical double taxation and avoidance of fiscal evasion in the international trade (or transactions). The Turkish Foreign Minister also paid a courtesy call on President of Sri Lanka Gotabaya Rajapaksa during the visit. This was the second visit to Sri Lanka by Foreign Minister of the Republic of Turkey Mevlüt Çavuşoğlu, who previously visited the island in June 2016. According to the Foreign Ministry press release, Foreign Minister Prof. G.L. Peiris and Çavuşoğlu also discussed the furtherance of political, economic, and cultural relations between the two countries. Highlighting the importance of economic co-operation, they identified the need to further diversify trade and work steadily towards the achievement of the $ 500 million per annum trade volume target, as identified at the second session of the Sri Lanka-Turkey Joint Committee on Economic and Technical Co-operation (JCETC) held in June 2021.  The promotion of investment and business-to-business linkages, enhancement of tourism and connectivity, and potential new areas of collaboration were discussed. Minister Peiris appreciated the role of Turkish Airlines in enhancing connectivity between Sri Lanka and European destinations, thus leading to the promotion of trade and tourism. Prof. Peiris had underscored the “warm, cordial, and mutually supportive partnership” existing between Sri Lanka and Turkey at a bilateral meeting with Çavuşoğlu last Friday (28). In this regard, Minister Peiris welcomed the desire demonstrated by Turkey to forge even closer co-operation with Sri Lanka in the framework of its “Asia Anew Initiative”. Turkish Foreign Minister Çavuşoğlu highlighted the importance placed by Turkey in its bilateral relations with Sri Lanka “as a friend, ally, and valued partner”. The Sri Lankan Foreign Minister acknowledged with appreciation the principled position maintained by Turkey with regard to the process of reconciliation in Sri Lanka, and the solidarity demonstrated in regional and multilateral fora.  Elaborating further, the Minister emphasised the necessity to address residual issues of reconciliation through a credible, inclusive domestic process, while safeguarding the rights of all communities and people living in Sri Lanka. The two minsters also deliberated on other areas of mutual interest comprising defence, security, and counter-terrorism co-operation, and looked forward to the exchange of high-level visits in the future.  Minister Peiris expressed Sri Lanka’s deep appreciation to the Government of Turkey for the medical aid donated through the Turkish Co-operation and Co-ordination Agency (TIKA) in 2021 to mitigate the impact of the Covid-19 pandemic, as well as the humanitarian assistance extended in terms of housing construction in southern Sri Lanka in the aftermath of the 2004 tsunami. State Minister for Regional Co-operation Tharaka Balasuriya, Foreign Secretary Admiral Prof. Jayanath Colombage, and senior officials of the Foreign Ministry were present at the bilateral meeting. Foreign Minister Çavuşoğlu was accompanied by Ambassador of Turkey to Sri Lanka Demet Şekercioğlu and advisors to the Foreign Minister. 


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