Sri Lanka is set to strengthen its international tax cooperation framework after the Cabinet of Ministers granted approval to sign an updated protocol to the Double Taxation Avoidance Agreement with Luxembourg.The original pact, signed on 31 January 2013, was designed to prevent individuals and companies from being taxed twice on the same income. Both countries are members of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Inclusive Framework, which requires participants to adopt minimum global tax standards.
As part of this obligation, Luxembourg’s tax authorities proposed amendments to ensure the agreement meets BEPS compliance benchmarks. After reviewing the recommendations, Sri Lankan tax officials agreed to the changes, leading to the drafting of a revised protocol.
The updated document has since received the necessary approvals from the Attorney General’s Department and the Ministries of Foreign Affairs, Foreign Employment, and Tourism.
Acting in his capacity as Minister of Finance, Planning, and Economic Development, President Ranil Wickremesinghe presented the proposal, which the Cabinet has now formally endorsed. The revised protocol will be signed to reinforce efforts to curb tax evasion and prevent double taxation between the two nations.
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