In a step towards enhancing economic cooperation, the Protocol for amending the Agreement on the Avoidance of Double Taxation was exchanged during President Anura Kumara Dissanayake’s State Visit to India.
Sri Lanka and India initially entered into an Agreement in 2013 for the avoidance of double taxation and the prevention of fiscal evasion concerning income taxes. As active members of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) Project, both nations are committed to implementing the minimum standards established by the Group of 20 Organization for Economic Cooperation and Development.
Recognizing the evolving economic landscape and the necessity to enhance the existing framework, both governments identified the need to revise the 2013 Agreement. The Ministry of Foreign Affairs, Foreign Employment, and Tourism, alongside the Attorney General, have approved the revised protocol, incorporating essential amendments to strengthen bilateral tax cooperation.
The avoidance of double taxation ensures that individuals and businesses are not taxed on the same income in both countries, promoting trade and investment by eliminating tax barriers and providing tax certainty. The protocol process ensures that changes are legally sound, transparent, and mutually agreed upon, maintaining the integrity of international treaties.
The President, in his capacity as the Minister of Finance, Planning, and Economic Development, proposed the signing of the revised protocol. The Cabinet has approved this proposal, and the signed protocol will be submitted to Parliament as per Section 75 (1) of the Inland Revenue Act, No. 24 of 2017.
This development marks a step forward in fostering greater economic collaboration between Sri Lanka and India, ensuring a fair and transparent tax environment for both nations' taxpayers.