According to new tax law Sri Lanka, corporate that violate transfer pricing (TP) rules can be fined up to 2% of the total amount of transactions between related parties. The new law also contains the provision to impose a penalty of up to 1% of the total amount of transactions with related parties when they fail to comply with discloser requirements.
When entities furnished inaccurate particulars or conceal particulars of income may face a penalty of 200% of the hidden amount. The new bill is to be presented to parliament very soon and may become law within next 2 months.
