1 May 2025
The Inland Revenue Department of Sri Lanka confirmed it will introduce VAT on digital services supplied by non-resident providers to Sri Lankan consumers.
This will be implemented from 1 October 2025 and guidance on registration, collections and compliance will be issued later this year.
Currently, foreign businesses providing digital services to consumers in Sri Lanka are not required to charge VAT on their sales. However, to ensure a level playing field between non-resident and resident providers, the Sri Lankan government will expect VAT at a rate of 18% to be charged on these transactions.
When implemented, this tax will apply to various electronic services, including streaming services, apps, films, e-books, e-journals, and internet services.
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