Statutory Compliance Business Taxation - EDBA Business School CA Sri Lanka Damith Gangodawilage MBA, PGD (BFA), EDBA, FTII, HNDA, FMAAT, ACPM, AIPFM(UK) Dy. Campus Director and Head of Academic Secretary of the Executive Council – Sri Lanka Institute of Taxation Statutory Compliance_Business Taxation

Statutory Compliance_Business Taxation Chapter Outline. Self-assessment scheme Assessment & Appeal PAYE Scheme Damith Gangodawilage Statutory Compliance_Business Taxation

Self-assessment Scheme Introduction. IRD Act impose a duty on every person or partnership Compute and pay the income tax in quarterly installment. Furnish a return of income either in writing or electronic mean Once the above requirement meet, taxpayer discharge his compliance responsibility as imposed by the act. Damith Gangodawilage Statutory Compliance_Business Taxation

Self-assessment Scheme Payment of tax. A person liable to pay tax is required to pay in four quarterly installment. 1st Quarter - on or before 15th August 2nd Quarter - on or before 15th November 3rd Quarter - on or before 15th February of the next year 4th Quarter - on or before 15th May of the next year Quarterly installment of tax for any YA shall be ¼ of the tax payable by him for the YA. Damith Gangodawilage Statutory Compliance_Business Taxation

Self-assessment Scheme Amount of quarterly installment: - Current year basis - Preceding year basis - Re-estimation on expiration of exemption Discount for quarterly installment: Where an individual pays a quarterly income tax payment 30 days prior to the due date shall deduct 10% such installment. Damith Gangodawilage Statutory Compliance_Business Taxation

Self-assessment Scheme Tax in default: Where the tax be paid in installment not paid on or before the due date become tax in default. Defaulter: The person who default the payment is deemed to be a defaulter. Where the tax is payable by more than one person or by partnership, each of such person or each partner shall be defaulter. Damith Gangodawilage Statutory Compliance_Business Taxation

Self-assessment Scheme Once the tax payer discharge his duty in good faith, it is open to the assessor to accept or reject and estimate the amount of tax payable. Similarly, if a person has not comply with the legal requirements of furnishing the return and payment of taxes result to issue the assessment. Damith Gangodawilage Statutory Compliance_Business Taxation

Self-assessment Scheme Appeal: When a person is assessed, it does not mean that he is liable to pay the tax so assessed. If he is not satisfied with the assessment, he has a right to appeal against the assessment. This has to be done within 30days after the notice of assessment. Late appeal may allow under the following circumstances, Absence from Sri Lanka Sickness Other reasonable cause Damith Gangodawilage VAT & NBT_Business Taxation

Statutory Compliance_Business Taxation PAYE Scheme Pay As You Earn (PAYE) scheme is system provide for whit holding of income tax at source at the time of payment of any profit from employment. It is the obligation of every employer to deduct the tax from the remuneration from his employee at the time of payment of such remuneration. Pl. refer employment income handout to get the meaning for employee and employer. Damith Gangodawilage Statutory Compliance_Business Taxation

Statutory Compliance_Business Taxation PAYE Scheme Duties of employer under PAYE Scheme: Deduct correct amount of income tax Pay all the tax deducted from employees remuneration to the CGIR on or before 15th day of the following month Forward monthly statement Furnish annual return on or before 30th April Issue the income tax deduction certificate to employee before 30th April Maintain the records on the prescribed forms Damith Gangodawilage Statutory Compliance_Business Taxation