Sri Lanka Amends VAT Exemptions and Increasing VAT Rate

The Sri Lanka Inland Revenue Department has published the Value Added Tax (Amendment) Act, No. 32 of 2023, which introduces a new VAT exemptions list under Part III of the First Schedule to the VAT Act from 1 January 2024. The current VAT exemptions list under Part II will cease to apply from that date.
Further legislation is pending certification and publication to increase the standard VAT rate from 15% to 18% and reduce the VAT registration threshold from LKR 20 million per taxable period (quarter) or LKR 80 million per annum to LKR 15 million per taxable period (quarter) or LKR 60 million per annum, both with effect from 1 January 2024.
Details on the implementation of these changes will be published once available.