Sri Lanka has giving enhanced depreciation of up to 200 percent with losses to be carried forward for up to 25 years for larger investments, Finance Minister Ravi Karunanayake said.
Instead of tax holidays, the depreciation allowance will be available based on the actual quantum of investments made, he said.
The incentives would be part of an income tax law to be brought to parliament soon.
"We want to make this information as soon as possible so that investors can make use of it for decisions," Karunanayake said.
Investments of less than 03 million dollars would get 200 percent depreciation allowance (tax deductible expense) if made in the Northern Province and 100 percent elsewhere.
For incentives based on jobs, for over 250 workers (investments of 03-05 million dollars) 200 percent allowance for the North and 100 percent elsewhere. For investments over 5 million and up to 50 million the same allowance will be given for workers of a minimum 350.
For large investments between 50 and 100 million a 100 percent allowance will be given. Unrelieved losses could be claimed in 10 years. For investments between 200 million to 2.0 billion dollars 150 percent allowance will be available.
For over 2.0 billion dollars, 150 percent allowance will be given, carried forward for 25 years.
Investments in ports will be given a 100 percent allowance to be claimed in 25 years. After investment allowance is fully absorbed, they will be taxed at 7 percent.
For investments of over 2.0 billion dollars withholding tax on corporate income tax will also be exempt during the period accelerated depreciation is in effect. Dividends for non-residents and PAYE tax exemption for up to 20 expatriate employees. (Colombo/May15/2015)