The Protocol amending the convention between the Government of Sri Lanka and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (1985) was signed on 20 September 2002 at the US Department of State, Washington DC. Milinda Moragoda, Minister of Economic Reform, Science & Technology and Christina B. Rocca, Assistant Secretary of State for South Asia, signed the agreement on behalf of their respective governments. Ambassador Ashley Wills, US Ambassador to Sri Lanka and The Maldives was also present at the signing.

The text of the new protocol, which has been long outstanding, was finalized at official level discussions during the visit of the Prime Minister Ranil Wickremasinghe to Washington DC in August 2002.

The Protocol reflects changes in the laws and policies of both countries since the signing of Double Taxation Convention in 1985. It contains provisions to facilitate investment between the two countries by addressing the issue of taxation of cross-border payments, investment income, business profits, capital gains and other types of income. The Convention and the Protocol also provide for the exchange of information on tax matters.

The conclusion of the Protocol to the USA Double Taxation Convention is expected to generate greater confidence in USA investors wishing to invest in Sri Lanka and would strengthen the existing legal framework for the promotion of US investments, such as the bilateral Investment Promotion and Protection Treaty and the Trade and Investment Framework Agreement (TIFA) which was concluded during the Prime Minister’s visit to Washington DC in August.