stampduty

  Type of Taxes

Stamp Duty

Stamp duty ordinance was enacted in Sri Lanka ​​in 1909. ​Thereafter in 1982 Parliament enacted No。 43 of Stamp Duty Act to provide for the i​​mposition of stamp duty on instruments and documents and for matter​s connected therewith or incidental thereto.

Stamp Duties on immovable property and certain movable properties were devolved to the Provincial Councils by the 13^th Amendment to the Constitution and stamp duties administered by the central government was suspended with effect from 1st May 2002. The government reintroduced stamp duty and enacted Stamp Duty (Special Provisions) Act No. 12 of 2006, but for only ten instruments.

Those specified instruments are :

• an affidavit,
• a policy of insurance,
• a warrant to act as notary public,
• a periodic lic​ense to carry on trade, business, profession or vocation,
• a claim, demand or request made by a service provider from the holder of a credit card, for the payment of a stated sum of money, due in respect of a transaction entered into using such credit card;,
• a mortgage for a definite sum of money which affects a property,
• a promissory note,
• a lease or hire of any property,
• a receipt or discharge given for any money or other property

​Chargeability​

Stamp Duty is charged, under Stamp Duty (Special Provisions) Act No。 12 of 2006 as amended by (Amendment) Act No。 10 of 2008 and 13 of 2011 at specified rates, on every specified Instrument,

• executed,drawn or presented in Sri Lanka;
• executed outside Sri Lanka in relation to a property in Sri Lanka and presented in Sri Lanka, (liability arises at the time it is presented in Sri Lanka)

Schedule of Stamp Duty comprising the instrument, rate, exemption and other details

Compounding of Stamp Duty

For the purpose of compounding, registration should be obtained from the Department of Inland Revenue. The following persons should obtain the registration.

• any person who issue insurance policy;
• any authority issuing licenses;
• any service provider of Credit cards
• any employer employing more than 100 employees
• any other person issuing any other instrument having regard to an impracticability or inexpediency of stamping instruments of such category, at the time  and in the manner prescribed.

The compounding Authority required compounding the relevant Stamp Duty and make the remittances to the Commissioner General of Inland Revenue quarterly within 15 days from the end of the quarter. A separate schedule should be maintained for each instrument category as follows.

Stamp Duty Period: ……… (Separate schedule should be maintained for the def​erent period).

Name of the Instrument: (Policies of Insurance, License, Liquor License, Notary License, Other License, Credit card transactions, Salary receipts, Receipts & Discharges, Bonds & Mortgages, Promissory Notes, and Lease, Rent & Hire).

Stamp duty can be paid -

1. By affixing stamps,
2. Stamp duty payable on any specified instrument relating to a mortgage or lease of any immovable property, should be credited to the bank account No. 7041555 of Commissioner General of Inland Revenue, at Bank of Ceylon – Taprobane Branch. The bank shall issue a certificate for a payment, and the certificate shall be affixed to the instrument.
3. Compounding of stamp duty by authorized persons.
   The compounded Stamp Duty payments should be credited to the Stamp Duty account No. 4153842 of Commissioner General of Inland Revenue at Bank of Ceylon –Taprobane Branch,

Use system printed pay-in- slips that have been issued by Inland Revenue Department for each quarter, to settle the Stamp Duty liability of that quarter. In the absence of system printed pay-in-slips, you are instructed to enter payment period code correctly in the pay-in-slip manually obtai​ned.

Ex.

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