3 October 2025
The Inland Revenue Department of Sri Lanka has confirmed that the introduction of VAT on digital services supplied by non-resident providers to Sri Lankan consumers will be postponed from 1 October 2025 until 1 April 2026.
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 require VAT at a rate of 18% to be charged on these transactions once the new rules come into effect.
The tax will apply to a wide range of electronic services, including streaming services, apps, films, e-books, e-journals, and internet services.
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