As tax season approaches in Sri Lanka, accurate data entry is critical for a smooth filing process. One of the most common administrative hurdles taxpayers and practitioners face is locating the correct Taxpayer Identification Number (TIN) for banks and finance companies. When preparing your Return of Income, you are often required to disclose specific details…
The 2026 Budget introduces a series of revenue proposals aimed at broadening the tax base, creating a level playing field between local and imported products, and modernising Sri Lanka’s tax administration. This article summarises the main tax-related proposals and explains their practical impact on businesses and taxpayers. 1. VAT & SSCL on Imported Coconut Oil…
Principal Act Capital Gains Tax is governed by the Inland Revenue Act, No. 24 of 2017 (as amended). Scope of Liability & Chargeability CGT is payable on the gains from the realisation (e.g., sale, exchange, transfer) of investment assets. The gain is calculated as the amount by which the consideration received for the asset exceeds…
Sri Lanka is taking a significant step in modernizing its tax system with the introduction of Value Added Tax (VAT) on digital services supplied by non-resident persons through electronic platforms to Sri Lankan consumers. This reform, effective from 01 October 2025, was formalized under the Gazette Notification No. 2443/30 dated 01 July 2025 and the…
In Sri Lanka, employment income taxation has undergone significant reforms in recent years, especially with the revival of Advance Personal Income Tax (APIT). For the Year of Assessment (YA) 2024/2025, salaried employees must be aware of how primary and secondary employment income is taxed and the importance of filing T-10 forms. This article serves as…
Simplified Value Added Tax (SVAT) Scheme in Sri Lanka By Kokila Mudugamuwa The Simplified Value Added Tax (SVAT) scheme was introduced by the Department of Inland Revenue in Sri Lanka on April 1, 2011, under the Value Added Tax Act. The primary objective of SVAT is to eliminate the need for VAT refunds for eligible…
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….
The Certificate of Income Tax Deductions, commonly referred to as the T-10, is an essential document prescribed under Section 87 of the Inland Revenue Act in Sri Lanka. This certificate plays a vital role for both employers and employees in the process of Advance Personal Income Tax (APIT) compliance. Purpose of the T-10 Certificate The…
In Sri Lanka, the taxation landscape has been evolving, and one of the significant changes that have garnered attention is the imposition of a 5% Advance Income Tax (AIT) on interest and discount on deposits. This article delves into the critical aspects of this tax, as outlined in the Inland Revenue Department’s Circulars SEC/2022/E/02 and…
Employment income is an essential component of taxation, representing the total gains and profits derived from an individual’s employment. This includes all remuneration received in cash or kind from an employer as compensation for services rendered. For the year of assessment (Y/A) 2023/2024 in Sri Lanka, employment income plays a pivotal role in calculating the…
The Inland Revenue Department (IRD) of Sri Lanka has issued a critical notice for VAT registered persons who have faced difficulties in obtaining Credit Vouchers for the clearance of deferred VAT at Customs. This issue has primarily arisen due to the issuance of Estimated Assessments on Value Added Tax (VAT) Returns. To address this, the…
The Inland Revenue Department (IRD) of Sri Lanka has issued an important notice to all taxpayers regarding the recovery of outstanding taxes. This notice highlights a serious issue that has recently come to light and provides crucial guidance for all taxpayers to ensure their safety and proper compliance with tax regulations. Key Information The IRD…
The circular, identified as Circular No. SEC/2024/E/01 and dated January 4, 2023, addresses suppliers involved in the production of tea, rubber, and coconut products. The primary focus of the circular is on the registration process under the Value Added Tax (VAT) and the Simplified Value Added Tax Scheme. The circular outlines the specific industries that…
In terms of section 102(1) of Inland Revenue Act, No. 24 of 2017 (IRA), every person chargeable with Income Tax shall obtain the registration with the Commissioner General of Inland Revenue (CGIR). Further to that, in terms of the section 102(3) of IRA, the Extraordinary Gazette Notification bearing No 2334/21 dated 31/05/2023 issued specifies additional…