Benefits, Concessions & Enablers

Exporters of Electrical and Electronic products and services are immensely benefited by a host of incentives and market access enablers. The government of Sri Lanka views this sector as one that stimulates innovation, investment, and export-led growth. In that endeavour numerous incentive schemes, including tax incentives, tax holidays, avoidance of double taxation, and policy facilitators have been introduced. 

Moreover, exporters of Electrical and Electronic products and services have the benefit of enjoying preferential access to global markets and a host of other benefits through numerous bilateral and multilateral free trade agreements, including the Indo-Lanka Free Trade Agreement, Pakistan-Sri Lanka Free Trade Agreement and South Asian Free Trade Area (SAFTA). The Generalised Scheme of Preferences Plus (GSP+) scheme facilitates preferential access to the EU. 

Exemption under Board of Investment of Sri Lanka (BOI)

• Exemption of Customs Duty on importation of capital goods during the project implementation period
• Exemption of Ports & Airport Development Levy on capital items for export-oriented manufacturing companies with an investment of over USD 200 million during project implementation period,
• Exemption from Custom duty, PAL, NBT for raw materials for export oriented projects (minimum investment USD 500,000)
• VAT deferment facility for raw materials for export oriented projects

Tax concession under Inland Revenue Department Act

• Reduced Corporate Income Tax Rate of 14% for projects predominantlyv1 engaged in export manufacturing
• Accelerated Capital Allowance on Depreciable Assets in addition to normal depreciation

Location	Expenses incurred on Decidable Assets√2	Enhanced Capital Allowance	Extended Period for Deducting Unrelieved Losses	Exemption from Dividends tax and employment income from WHT
Nothern Province	>US$ 3 Mn and <= US$ 1,000 Mn	200%	10	✗
	> US$ 1000 Mn	200%	25	✓
Other than Nothern Province	> US$ 3 Mn and <= US$ 100 Mn	100%	10	✗
	>US$ 100 Mn and <= US$ 1,000 Mn	150%	10	✗
	> US$ 1000 Mn	150%	25	✓

Temporary Concessions (Only for 3 years from 1 April 2018)

Location	Expenses incurred on Decidable Assets√3	Enhanced Capital Allowance
Nothern Province	Up to US$ 3 Mn	200%
Other than Nothern Province	Up to US$ 3 Mn	100%

• Depreciable assets (other than intangible assets) comprising plant or machinery that are used to improve business Classification of Depreciable Assets
• Class 1 : computers and data handling equipment together with peripheral devices
• Class 2 : buses and minibuses, goods vehicles; construction and earthmoving equipment, heavy general purpose or specialised trucks, trailers and trailer-mounted containers; plant and machinery used in manufacturing.
• Class 3 : railroad cars, locomotives, and equipment; vessels, barges, tugs, and similar water transportation equipment; aircraft; specialisedpublic utility plant, equipment, and machinery; office furniture, fixtures, and equipment; any depreciable asset not included in another class.
• Class 4 : buildings, structures and similar works of a permanent nature
• Class 5 : intangible assets, excluding goodwill - applicable only for normal depreciation

Preferential market access, Bilateral and Multilateral FTA’s

Host of bilateral, multilateral and preferential access provisions present make Sri Lanka an attractive destination for export sourcing. Indo-Sri lanka Free Trade Agreement (ISFTA), Pakistan-Sri Lanka Free Trade Agreement (PSFTA), GSP + schemes, SAARC Preferential Trading Agreement (SAPTA), Singapore-Sri Lanka Free Trade Agreement (SSLFTA), South Asian Free Trade Area (SAFTA) and Global System of Trade Preferences (GSTP) are few amongst many other such attractive enablers.

For more information visit:
http://www.doc.gov.lk/index.php?option=com_content&view=article&id=7&Itemid=134&lang=en

State agencies and government ministries acting as facilitators

Board of Investment (BOI)
Established in 1978, The Board of Investment of Sri Lanka (BOI) is one of the foremost investment promotion agencies in South Asia.

For more information: www.investsrilanka.com

Inland Revenue Department of Sri Lanka
Enabling investor and public confidence the Inland Revenue Department offers fair, friendly and expeditious service, fostering a beneficial tax culture

For more information visit: www.ird.gov.lk

Ministry of Industry and Commerce
Responsible for the development of a robust industrial sector in the country, Ministry of Industries plays a dynamic role in promoting industrial development within the wide policy framework of the government

For more information visit: www.industry.gov.lk

Sri Lanka Customs
Established in 1806, Sri Lanka Customs is one of the oldest government departments, and is responsible for collection of revenues

For more information visit: www.customs.gov.lk

Ministry of Finance
The Ministry of Finance is responsible for macro-economic policies, annual budget and Appropriation Acts, public financial management, local / foreign savings, investments, public debts, banking, finance and insurance activities, international financial cooperation and directing social security and economic development activities

For more information visit: www.treasury.gov.lk