- Sri Lanka is implementing a VAT framework for non-resident digital service providers.
- VAT of 18 percent will be charged on digital services by non-resident providers.
- The VAT Amending Act No. 04/2025 was introduced on April 11, 2025.
- The effectiveness of the Act was postponed due to uncertainty.
- An Implementing Resolution was issued on July 1, 2025, to clarify VAT applicability.
- Non-resident providers must register for VAT starting October 1, 2025.
- Registration is electronic and simplified.
- Providers must register if they exceed Rs. 60 million in the past 12 months or Rs. 15 million in the past 3 months.
- Taxable digital services include cloud computing, software as a service, e-commerce, digital marketing, cybersecurity, fintech, marketplace platforms, and streaming services.
- Non-compliance may result in domain blocking and late payment fines.
Source: 1stopvat.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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