VAT amendments to take effect from July 1
May 3, 2026 01:16 pm
The Gazette containing amendments to the Value Added Tax (VAT) system, which will come into effect from July 1, has been issued by the Ministry of Finance, Planning & Economic Development.
Accordingly, VAT will be imposed on services provided through electronic platforms starting from July 01, 2026.
The amendments also include a reduction in the threshold for the registration of persons liable for taxation under Section 10 of the principal Act, which will also be effective from the same date.
Under the new provisions, at the end of any taxable period, a person must have supplied taxable goods or services or a combination of both within Sri Lanka exceeding a total value of Rs. 9 million during that period to be required for tax registration.
Furthermore, the VAT rate on financial services is proposed to be increased from 18% to 20.5%.
Provisions will also be introduced for the registration and payment of VAT on digital services.
