- Sri Lanka will impose VAT on digital services from nonresident providers starting October 1, 2025.
- A standard VAT rate of 18 percent will apply to these services.
- The order lists examples of taxable electronic services.
- VAT registration is mandatory if 12-month turnover exceeds LKR 60 million or 3-month turnover exceeds LKR 15 million.
- A Taxpayer Identification Number is required upon registration.
- Nonresident suppliers must issue VAT-compliant invoices and file VAT returns electronically.
- Suppliers must keep records for five years for audit purposes.
- Penalties for noncompliance and registration cancellation procedures are outlined.
- This aligns Sri Lanka with other regions implementing digital VAT regimes.
Source: globalvatcompliance.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
