What are the regulations for tax exemptions?

Based on the provided context, there are several regulations for tax exemptions in Sri Lanka, which include:

  1. Solar Power Systems: The importation of solar panel modules, accessories, or solar home systems for the generation of solar power energy is exempt from the Nation Building Tax at the point of importation.
  2. Corporate Income Tax: There is a provision to declare the total expenditure on the acquisition of solar panels when filing Corporate Income Tax, which can be entered in Cage 515 of the tax form.
  3. Value Added Tax (VAT) Exemptions:
    • Exemptions specified in item (i) and item (ii) of paragraph (f) of Part II of the First Schedule to the VAT Act, for the period prior to the commencement of the VAT (Amendment) Act, No. 32 of 2023.
    • Exemptions specified in item (xxv) and item (xxvi) of paragraph (b) of Part III of the First Schedule to the VAT Act, for any period on or after the commencement of the VAT (Amendment) Act, for registered persons engaged in supplying goods or services to any Strategic Development Project.
  4. Inland Revenue Act Exemptions: The Inland Revenue Act, No. 10 of 2006, lists various exemptions from income tax, including but not limited to:
    • Certain interest received.
    • Certain dividends.
    • Profits and income from lands and improvements thereon.
    • Certain subsidies.
    • Profits and income derived from outside Sri Lanka.
    • Profits and income from agricultural undertakings.
    • Profits and income of any new undertaking investing not less than fifty million rupees.
  5. Policy Changes:
    • Removal of certain exemptions with effect from 01.10.2022.
    • Changes in the standard VAT rate during the year.
    • Decrease of the VAT registration threshold effective from October 01, 2022.
    • Termination of exemption on supply of condominium residential accommodation, making it liable for VAT.

Please ensure to consult the latest tax guidelines or a tax professional for the most current and detailed information, as tax laws and regulations can change frequently.

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