Tax Invoice in Sri Lanka: A Comprehensive Guide
By Kokila Mudugamuwa
A tax invoice is an essential document in the administration of Value Added Tax (VAT) in Sri Lanka. It serves as evidence of a taxable transaction between a VAT-registered supplier and customer. Understanding the key elements of a tax invoice and the regulations surrounding its issuance is crucial for compliance with Sri Lankan tax laws.
Key Components of a Tax Invoice
A valid tax invoice in Sri Lanka must contain the following details:
- Supplier and Customer Details:
- Supplier: Name, address, and VAT registration number.
- Customer: Name, address, and VAT registration number.
- Invoice Details:
- Invoice Number: A unique serial number, not exceeding 40 characters without spaces.
- Invoice Date: The date when the invoice is issued.
- Date of Supply: The date when the goods or services were supplied.
- Description of Goods or Services:
- A detailed description of the goods or services provided.
- Quantity or volume of the goods or services.
- Financial Details:
- Value of Supply: The total value of the goods or services supplied.
- VAT Amount: The VAT charged on the supply, typically at 18%.
- Total Consideration: The total amount payable, including VAT.
- Prominent Labeling:
- The words “Tax Invoice” should be stated prominently on the document.
Specimen of a Tax Invoice
Here’s an example of how a tax invoice might be structured:
Supplier Details:
- Name: ABC Suppliers (Pvt) Ltd
- Address: No. 123, Market Street, Colombo, Sri Lanka
- VAT Registration Number: 123456789
Customer Details:
- Name: XYZ Enterprises (Pvt) Ltd
- Address: No. 45, Business Avenue, Kandy, Sri Lanka
- VAT Registration Number: 987654321
Invoice Details:
- Invoice Number: INV20240001
- Invoice Date: 12th September 2024
| Description | Quantity/Volume | Unit Price (LKR) | Total Value (LKR) |
|---|---|---|---|
| Product A | 100 units | 500.00 | 50,000.00 |
| Product B | 50 units | 1,000.00 | 50,000.00 |
| Service X | 10 hours | 2,000.00 | 20,000.00 |
- Total Value of Supply: LKR 120,000.00
- VAT @ 18%: LKR 21,600.00
- Total Consideration (Including VAT): LKR 141,600.00
Payment Terms: Payment due within 30 days of the invoice date.
Issuing a Tax Invoice: Guidelines
- Issuance to VAT-Registered Persons: Only a VAT-registered supplier should issue a tax invoice to another VAT-registered person.
- Request and Issuance Timeline:
- The purchaser must request the tax invoice within 14 days from the time of supply if a VAT-inclusive invoice is received.
- The supplier must issue the tax invoice within 28 days of the supply.
- Tax Invoice for Imports: In cases of importation, the Customs Declaration (CUSDEC) or any document authenticated by the Director General of Customs is treated as a tax invoice.
- Non-Registered Persons: If a taxable supply is made to a non-registered person, the supplier should not issue a tax invoice but instead provide an invoice showing the total consideration as one figure, inclusive of tax.
Importance of Tax Invoices
Tax invoices are critical for:
- Proper tax administration and record-keeping.
- Calculating and collecting output tax from customers.
- Ensuring compliance with VAT regulations.
Download the Tax Invoice Specimen (Click Here)
For reference, you can download a specimen of a tax invoice to understand its format and required details. This serves as a guide for preparing tax invoices correctly and ensuring compliance with Sri Lankan tax laws.
