KPMG webinar next week on ‘Recent Changes in Foreign Exchange Regulations & Tax Impact’

Suresh R.I. Perera

Sachithra Chandrasena

Rifka Ziyard

The KPMG Academy will enlighten decision makers on ‘Recent Changes in Foreign Exchange Regulations & Tax Impact’ at the Friday Mid-Afternoon Chat on 18 June from 3 p.m. onwards. 

Upon the introduction of the Foreign Exchange Act No. 12 of 2017, foreign exchange rules were significantly relaxed. However, with the recent foreign exchange crisis faced by Sri Lanka, several changes were introduced during the past few months to stabilise the situation. 

Gazette No 2213/34 and 2213/35 dated 3 February introduced certain changes in relation to the applicable foreign exchange regulations on capital transactions to be carried out by residents and non-residents. 

With the introduction of the Foreign Exchange Act in 2017, regulations were issued providing the authorised class or classes of capital transactions in foreign exchange and the procedure applicable on the same. There are several gazettes issued in the recent months to modify certain areas on authorised class or classes of capital transactions including the capital transaction undertaken outside Sri Lanka by a resident person and the capital transaction undertaken in Sri Lanka by a resident outside Sri Lanka, which leads to enhanced clarity on the process to be adopted in carryout the capital transactions.

Additionally, the rules pertaining to the remittance of export proceeds has been changed four times till now during this year. With the new changes to the tax law there seems to be a lacuna in the law in relation to export of service which could lead to export of service being taxed at standard rate although such exporters do contribute to the national economy by attracting foreign exchange. 

The tax clearance certification process for remittance of payments to non-residents is also subject to certain revisions. The Commissioner General of Inland Revenue has issued a revised notice to the authorised dealers and persons engaged in outward remittance by elaborating the requirement of tax clearance certificate during the pandemic period.  These are few of the areas lined up for discussion in this interactive session and would also include the temporary restrictions imposed due to the COVID-19 pandemic. 

The session will be conducted by Principal – Tax & Regulatory Suresh Perera, Director – Tax & Regulatory Rifka Ziyard and Senior Manager/Director – Tax & Regulatory Sachithra Chandrasena of KPMG.