Sri Lanka

An individual is resident in Sri Lanka for a year of assessment if they reside in Sri Lanka, are present in the country for 183 days or more in any 12-month period commencing or ending during that year, are a government employee or official whose spouse is posted abroad during the year, or are employed on a Sri Lankan ship during the period of that employment.

Individual taxpayers must file their annual return of income no later than eight months after the end of the year of assessment.

Non-resident individuals' assessable income for a year of assessment is limited to income from employment, business, investment, or other sources to the extent it arises in or is derived from a source in Sri Lanka; resident individuals are instead assessed on income from all sources, wherever it arises.

Sri Lanka reduces an individual's taxable income through two mechanisms: qualifying payments, which resident and non-resident individuals may both deduct, and reliefs — residents may deduct the aggregate reliefs in the Fifth Schedule, while non-resident Sri Lankan citizens may deduct only the specific relief in paragraph 2(a) of that Schedule.

Foreign-sourced income received in foreign currency and remitted through a bank, and payment for services rendered outside Sri Lanka likewise received in foreign currency and bank-remitted, are each capped at a 15% tax rate rather than taxed under the standard progressive schedule.

Registration is mandatory, effective from 1 January 2024, once the value of taxable supplies of goods or services (other than financial services) exceeds LKR 15 million for a quarter or LKR 60 million for a 12-months period; voluntary registration is also available irrespective of the threshold. VAT payment is due monthly, by the 20th of the following month, and returns are due by the last day of the month after each taxable period, which may itself be monthly or quarterly.