News
Sweeping tax concessions for massive project in Fort
A five-acre extent of land has been allocated to operate a mixed utility complex including a luxury hotel in Colombo Fort under the Strategic Development Project initiated by the Government.The project will be operated by the WelcomHotels Lanka (Pvt.) Ltd. under an agreement entered into by the Board of Investment in May this year.
The total investment on the project is US$ 140 million (about Rs 18 .6 billion). It has been identified as a project of national interest that will bring economic and social benefit and change the landscape of the country.The project company has initially deposited into the account of the Deputy Secretary to the Treasury (Urban Development Fund) an upfront Lease Premium of US$ 73. 5 million (around Rs. 9.8 billion).
The Government has decided to give several tax concessions to the project company including an exemption from income tax for ten years.
The project company will also be exempt from the payment of withholding tax on several matters including interest on foreign loans taken for capital expenditure, technical fees to consultants; management fees up to 3% on gross revenue and royalty fees up to 1.5% on gross revenue.
An exemption will also be given to the Value Added Tax on the importation of project-related goods and the local
purchases of project related goods and services during the implementation period.
The VAT exemption will be applicable not only for direct suppliers to the company/project but also for supplies made by a sub-contractor to a contractor as approved by the project.
The payment and charge of Port and Aviation Levy (PAL) will also be fully exempted on all items imported for implementing the project, (whether directly imported by the project company or sourced through contractors, during the project implementation period.
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