Colombo, September 23, 2002. The US Department of the Treasury has announced the signing of a protocol to amend the 1985 bilateral income tax convention between the United States and Sri Lanka. The new protocol amends a convention signed in 1985 but not entered into force.

The protocol was signed by Ms. Christina A. Rocca, US Assistant Secretary of State for South Asia, and by the Sri Lanka Minister of Science, Technology, and Economic Reform Milinda Moragoda. Also in attendance at the ceremony was Ambassador E. Ashley Wills, US Ambassador to Sri Lanka.

These amendments modernize the convention to reflect changes in the laws and policies of both countries since 1985. The convention, as amended by the protocol, contains provisions to facilitate investment between the two countries by addressing the taxation of:

• cross-border payments of investment income

• business profits

• capital gains and other types of income

The convention and protocol also provide for the exchange of information on tax matters.

The protocol, which replaces an earlier protocol signed in 1991, will be sent to the US Senate for its advice and consent to ratification. If the Senate approves the protocol and the convention enters into force, it will represent the first income tax treaty between the two countries.

(US Embassy press release)