The Department of Inland Revenue has issued a revised circular for deduction of Withholding tax (WHT) and Advance Income Tax.
The circular No SEC/2020/03 dated May 19 2020 has been replaced by this circular.
The revised circular says that payment of any amount by any bank or institution as interest (excluding exempt interest) or similar payments such as discounts and income received from Islamic Finical translation (Referred in Section 32 of IRA) which has source in Sri Lanka , payable to any non resident person is liable to be deducted of WHT at 5%.
However, in the case of non-resident individual but who is a citizen of Sri Lanka , WHT should be deducted if his aggregate interest income or similar payments from a bank/ financial institution exceeds Rs. 250,000 for any month or Rs. 3,000,000 for any year of assessment.
More details are given the circular attached below;
