The Ministry of Finance, Planning and Economic Development has issued a gazette notification introducing amendments to the Value Added Tax (VAT) system. The new tax regulations are scheduled to come into effect from July 1.
According to the amendments, VAT will be imposed on services provided through electronic platforms, and special provisions have been introduced for the registration and payment of taxes on digital services.
The threshold for tax registration has also been revised. Accordingly, a person is required to register for VAT if the total value of taxable supplies of goods or services in Sri Lanka exceeds LKR 9 million within a taxable period.
In addition, the VAT rate on financial services is proposed to be increased from 18% to 20.5%. The new regulations aim to strengthen tax compliance and broaden the tax base in the digital economy.
