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July 22, 2004
JS-1809 Treasury Welcomes Entry into Force of
U.S.-Sri Lanka Income Tax Treaty The Treasury Department today welcomed the entry into force of the income tax treaty between the United States and Sri Lanka on July 12, 2004. This new tax treaty relationship will serve to eliminate tax barriers to cross-border trade and investment between the two countries. The agreement includes provisions addressing the taxation of cross-border payments of business profits, investment income, and other types of income and gains. The agreement provides greater certainty to taxpayers with respect to the tax treatment of their cross-border activities and reduces the potential for double taxation of income from such activities. The agreement also contains administrative provisions, including mechanisms for the resolution of disputes.
The United States and Sri Lanka signed the tax treaty in Colombo on March 14, 1985 and signed an amending protocol in Washington on September 20, 2002. The United States Senate approved the treaty and amending protocol on March 25, 2004. The treaty, as amended by the protocol, entered into force with the exchange of instruments of ratification in Colombo on July 12, 2004.
With this entry into force, the provisions relating to withholding taxes will be effective for amounts paid or credited on or after September 1, 2004. The provisions relating to other taxes will be effective for taxable periods beginning on or after January 1, 2004.
This agreement represents a new tax treaty relationship for the United States. The Treasury Department is committed to continuing to extend and broaden the U.S. tax treaty network, including new agreements with emerging economies.
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