- Sri Lanka enacted the Value Added Tax (Amendment) Act No. 14 of 2026 (certified 30 June, gazetted 3 July 2026), introducing a framework to tax non-resident digital service providers, with most measures applying from 1 July 2026 (replacing the earlier 1 October 2025 start). [kpmg.com], [globalvatc…liance.com]
- Non-resident digital providers must register if supplies to Sri Lankan customers exceed LKR 60 million in 12 months or LKR 15 million in a quarter; a recipient is deemed in Sri Lanka when two indicators are met (billing address, local bank/payment instrument, or IP address), with a B2B carve-out for VAT-registered customers. [kpmg.com], [vatupdate.com]
- Other measures: the mainstream VAT registration threshold stays at LKR 60 million (the proposed cut to LKR 36 million was dropped), and the VAT rate on financial services rises from 18% to 20.5% from 1 July 2026, alongside input-tax and enforcement changes. [kpmg.com], [globalvatc…liance.com]
External links
- Sri Lanka: VAT Amendment Act introduces digital services VAT and compliance changes – Global VAT Compliance [globalvatc…liance.com]
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See also
Click HERE to Visit the YouTube Channel of Global VAT Compliance
- Sri Lanka enacted the Value Added Tax (Amendment) Act No. 14 of 2026 (certified 30 June, gazetted 3 July 2026), introducing a comprehensive framework for taxing non-resident digital service providers, with most measures applying from 1 July 2026 as part of a broader VAT modernisation. [kpmg.com], [vatupdate.com]
- Non-resident digital providers must register if supplies to Sri Lankan customers exceed LKR 60 million in 12 months or LKR 15 million in a quarter. A recipient is deemed in Sri Lanka when two indicators (billing address, local bank/payment instrument, or IP address) are met; B2B supplies to VAT-registered persons are carved out. [kpmg.com]
- Other measures: the mainstream VAT registration threshold stays at LKR 60 million (the proposed cut to LKR 36 million was dropped); the VAT rate on financial services rises to 20.5% from 1 July 2026; plus input-tax and sector-specific changes for garment and film sectors. [kpmg.com], [newswire.lk]
Source
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