- VAT applies to non-resident digital service providers for services rendered to persons in Sri Lanka from 1 July 2026.
- Mandatory VAT registration within 3 months if annual turnover exceeds LKR 36 million or LKR 9 million per quarter.
- VAT does not apply if the recipient is VAT-registered (B2B carve-out), with proper documentation.
- Returns must be submitted; payment can be made via an appointed representative.
- Compliance procedures and exemptions will be specified by the IRD.
Source: assets.kpmg.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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