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In terms of recent amendments to Finance Act 100% transfer tax is applicable to non-citizens of Sri Lanka.
 
The tax prescribed in the above will be applicable to a company, which is incorporated under the Companies Act of Sri Lanka, if more than twenty five per centum of the issued shares in such Company are owned by non citizen of Sri Lanka.
 
However exemptions are granted by Extra Ordinary Gazette No. 1386/18 dated 30/03/2005 to the following categories.
 
(1) Exemption on BOI Enterprises
 
Business Activity Investment criterion Other Conditions
1. Construction of housing units or condominium apartments for residents or non residents
  

a) 100 units should be constructed

b) Each housing unit should be constructed on a land not exceeding 10 perches.

c) Total value of the land is met by inward remittance of foreign currency

2. Construction and operation of a hospital or a hotel project
US $ 10 Mn. or its Rupee equivalent
Total value of the land is met by inward remittance of foreign currency
3. Infrastructure development or any other development determined by the Minister as being essential for economic progress of Sri Lanka
US $ 50 Mn or its Rupee equivalent
Total value of the land is met by inward remittance of foreign currency
4. Manufacture of non-traditional goods for export
US $ 1 Mn or its Rupee equivalent
a) Land should be utilized to construct its manufacturing plant, office, stores, dormitories for workers
b) Total value of the land is met by inward remittance of foreign currency
 

(2) Exemption on Other Agencies & Institutions etc.
 
(a) Lending institutions such as Bank, finance leasing institution, which are incorporated under Banking Act and Finance Leasing Act;
 
  • When the ownership of the land is transferred to such institution to recover of a debt
  • To carry on its business. (Para 1 to 05 in Regulation No. 1386/18).

(b) Condominium Unit situated on or above the fourth floor of condominium property, provided value of such unit is met by inward remittances of foreign currency (Para 7 in Regulation No. 1386/18).
 

(c ) On a dissolution, of a company, a property which had been acquired by this company prior to 5th October 2004 and transferred to another company consequent on merger of that Company.
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