- Implementation of 18% VAT on digital services by non-resident providers in Sri Lanka postponed to April 1, 2026.
- Postponement approved by Cabinet on September 3, 2025, pending parliamentary approval, due to practical concerns from service providers.
- VAT aims to equalize tax treatment for local and foreign providers and aligns Sri Lanka with global practices.
- Affected services include streaming, apps, e-books, films, internet, social media, e-commerce, FinTech, and electronic marketplaces.
- Foreign providers exceeding LKR 60 million annual turnover must register for VAT; compliance guidance to be issued; B2B supplies may use zero-rating reverse charge.
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.
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