Tax alerts and highlights
Transfer pricing regulations under extraordinary gazette no. 2104/04 (“Regulations”), have been issued under Section 194 of the Inland Revenue Act no.24 of 2017 (“IRA”), to replace the extraordinary gazette notification no.1823/05 issued under Inland Revenue Act no.10 of 2006. The Regulations will be effective from 1 April 2018.
Pursuant to the implementation of the new Inland Revenue Act No.24 of 2017 (“IRA”) with effect from 1 April 2018, the Department of Inland Revenue has issued guidelines to withholding agents under Circular No. SEC/2018/06 dated 18 April 2018. We highlight the salient guidelines enumerated under the circular, on the deduction of WHT on payments to residents and non-residents under Section 84 and Section 85 of the IRA.
The Inland Revenue Act No.24 of 2017 came into effect on the 01st of April 2018. Important changes and concepts have been introduced by this act such as capital gains, permanent establishment etc. The IMF stated that the implementation of the new act shall broaden the tax base by removing excess tax incentives; modernize rules related to cross-border transactions to address base erosion and combat tax avoidance; reduce complexity through an improved principles-based drafting style; and strengthen and clarify existing powers of the Inland Revenue Department to improve enforcement.