¡¡¡¡COLOMBO, February 6 (Xinhuanet) -- Sri Lanka and Kuwait have signed an agreement on avoidance of double taxation and the prevention of fiscal evasion with respect to income tax on trade between the two countries, the official Daily News said on Wednesday.

¡¡¡¡The agreement signed Tuesday includes provisions for taxation at reduced rates of interest, dividends and royalties in order to promote capital inflows.

¡¡¡¡Sri Lanka's Commissioner General of Inland Revenue B.T. Pererasaid the agreement provided for a complete tax sparing credit. An investor would be given credit in his home country for taxes paid in the other country.

¡¡¡¡The investor would also be given credit for taxes he had to pay unless exemption of reduction was granted under legal provision for tax incentives.

¡¡¡¡Regarding airline profits complete exemption has been given inthe country of source. However, tax will be levied on shipping profits in the country of source subject to a 50 percent reduction.

¡¡¡¡The agreement also provides for an exchange of information between the two countries to facilitate the enforcement of the agreement and help the prevention of tax evasion. Enditem

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