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Message: <blockquote data-quote="sandaru1rox" data-source="post: 28253003" data-attributes="member: 384288"><h3>Upcoming changes to Withholding Tax (WHT) applicable for residents and non-residents of Sri Lanka</h3>Based on  the 2022 interim budget passed in the Parliament on the 30th of August  2022, the below proposals will be effective subject to the legislation being issued to this effect in due course.Accordingly, the changes are expected to come in to effect under Withholding tax (WHT) or Advanced Income Tax (AIT) with effect from 1st October, 2022a) Making Advance Income Tax (AIT) or Withholding tax (WHT) mandatory on interest incomeb) Considering WHT/AIT on Interest Income of individual taxpayers as a final paymentc) Deduction of AIT/WHT from Interest payments of both Resident and Non-resident persons at the rate of 5% with the exception for senior citizens with a relief up to LKR 1.5 million p.a., subject to the declaration being submitted to the BankThe above is a factual presentation of the proposals as they were presented and we are yet to ascertain the specific details on any exemptions (excluding senior citizens accounts) applicable for any specific account types / persons.Once the relevant legislation  is passed to this effect the Bank will be enacting the changes with immediate effect and will proceed to charge WHT accordingly and will be communicating the details regarding any other exemptions granted.In the case of senior citizen deposit holders, a declaration (to be confirmed upon legislation being issued) should be submitted to obtain the benefit of the relief of interest income up to LKR 1.5 million per annum and the Bank will announce a deadline within which the declaration is required to be submitted. WHT charged on senior citizen’s interest income up to such deadline will be reversed in line with the details submitted via the aforementioned declaration.Please note as defined by the Inland Revenue Act a “senior citizen” with respect to a year of assessment means an individual who is –(a) a citizen of Sri Lanka during the year of assessment;(b) resident in Sri Lanka for the year of assessment; and(c) who is sixty years old or above at any time during the year of assessment.* In the case where a declaration is not submitted to the Bank, the Bank will apply 5% WHT on the full interest payment earned on deposits held by senior citizens.Thank you for banking with HSBC.</blockquote>

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