2024
- December 5th 2024 - The Department of Inland Revenue (DIR) has issued a notice (PN/IT/2024-02) dated 03 December 2024 extending the deadline for filing Income Tax Returns for the Year of Assessment 2023/2024.
Taxpayers who submit their returns on or before 07 December 2024 will be relieved of penalties, criminal proceedings, and default assessments.
DIR officials will be available at IRD offices until 06 December 2024 to provide technical assistance for online filing.
Attached herewith the notice uploaded in the DIR website.
Download - November 26th 2024 - Please find attached herewith the Notice issued by the Commissioner General Inland Revenue in relation to the submission of the Income Tax Return for the Year of Assessment 2023/24.
As per the notice, since 30 November 2024 is falling on a Saturday, the Head Office and the Regional Offices will be opened as a usual working day.
Download - September 11th 2024 - Please find attached herewith the Gazette Notification bearing No. 2400/40 (dated 06 September 2024) uploaded to the website of the Department of Government Printing.
The Gazette amends the Rules made by the Tax Appeals Commission under S.8 of the Tax Appeals Commission Act No. 23 of 2011 and Amendments thereto, and published in Gazette Extraordinary No. 1760/4 dated 28 May 2012.
Download - June 17th 2024 - In March 2023, the IMF Executive Board approved a 48-month extended arrangement under the extended fund facility, to support Sri Lanka's economic policies and reforms.
The IMF Executive Board expressed its views on 12 June 2024, on the staff level report completed on 29 May 2024, following the discussions with Sri Lankan officials in March.
This tax alert seeks to highlight the salient features of the new tax measures discussed and included in the IMF staff report on the second review.
Download - May 31st 2024 - Further to the Gazette Notification No. 2376/25 issued on 21 March 2024 (you may refer KPMG Tax Alert issued on 15 April 2024) in relation to the information to be shared on a regular basis to the Commissioner General of Inland Revenue (CGIR), we attach herewith the Notice issued by the Department of Inland Revenue dated 21 May 2024.
Download - April 25th 2024 - The Commissioner General of Inland Revenue (CGIR) has prescribed the following methods for tax payments as per the Gazette Notification no 2378/33 dated 04 April 2024 issued under Section 145 (3) of the Inland Revenue Act No 24 of 2017 and Amendments thereto :-
Download - April 15th 2024 - Please find attached herewith the Gazette Notification No. 2376/25 (dated 21 March 2024) uploaded on the website of the Department of Government Printing :-
Download - March 23rd 2024 - The Social Security Contribution Levy (Amendment) Act No 15 of 2024 (Amendment Act) was certified by the Speaker on 20 March 2024. Synopsis of the Amendment Act is as follows :-
Download - March 23rd 2024 - The Value Added Tax (Amendment) Act No.16 of 2024 (Amendment Act) was certified by the Speaker on 20 March 2024. Following is the summary of the Amendment Act:
Download - February 12th 2024 - Further to the Gazette Notification No.2334/21 dated 31st May 2023 which mandates a “resident person” to obtain a TIN (Taxpayer Identification Number) and the notice of registration issued by way of a web notice in December 2023, the DIR has issued a new web notice dated 30th January 2024 (Ref No: PN/TIN-REG/2024-01) giving clarity as to who is considered a “resident person” for purposes of tax in Sri Lanka. The said Notice also clarifies the circumstances a “non-resident person” is required to obtain a TIN.
Download - January 12th 2024 - The Department of Inland Revenue has issued Circular No. SEC/2024/E/01 dated 04 January 2024 on the registration of certain industries under the Value Added Tax (VAT) and Simplified Value Added Tax (SVAT) scheme.
Download - January 6th 2024 - A Bill to amend the Social Security Contribution Levy Act No. 25 of 2022 was issued on 04 January 2024 by the Minister of Finance, Economic Stabilization and National Policies. Synopsis of the Amending Bill is as follows :-
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2023
- December 29th 2023 - Further to the KPMG alert issued on 26 December 2023 in relation to the VAT rate increase, we attached herewith the following related documents:-
Download 1 | Download 2 - December 29th 2023 - Further to the Gazette Notification No.2334/21 dated 31st May 2023, the Department of Inland Revenue has published a notice giving clarity as to how a person could register for Income Tax. Attached herewith the notice published in the Department of Inland Revenue Website and the Gazette Notification published previously.
Download 1 | Download 2 - December 26th 2023 - Further to the latest Bill to amend the Value Added Tax Act No. 14 of 2002 (VAT Act) issued on 14 December 2023, it has been ordered by the Minister of Finance, Economic Stabilization and National Policies to rescind the previous Government Gazette (2295/08) and to issue the Gazette Notification No 2363/22 dated 19 December 2023 under Section 2A of VAT Act.
Download - December 20th 2023 - Please find attached herewith the notice no PN/VAT/2023-01 dated 18 December 2023 uploaded in the Department of Inland Revenue (DIR) website on the exemption of goods and services under the Part III to the First Schedule to the Value Added Tax Act No. 14 of 2002 (as last amended by the Value Added Tax (Amendment) Act, No. 32 of 2023) with effect from 1st January 2024.
Download - December 15th 2023 - Further to the KPMG alert issued on 12th December 2023, the Bill to amend the Value Added Tax Act No. 14 of 2002 (VAT Act) issued on 31st August 2023 has been certified by the Speaker on 13 December 2023. The snapshot of the amendments introduced via the Value Added Tax (Amendment) Act No.32 of 2023 are provided below and please refer the KPMG alert dated 12th December 2023 for further information.
Download - December 12th 2023 - The Bill to amend the Value Added Tax Act No. 14 of 2002 was published on 31 August 2023 and the Committee Stage Amendments had been approved by Members of the Parliament on 11 December 2023. The VAT Amending Act is still pending the certification by the Speaker. Key changes provided in the VAT Bill together with the Committee Stage amendments are as follows :-
Download - October 31st 2023 - As per the Cabinet Decisions dated 30 October 2023 (published on the website of the Department of Government Information), the Cabinet of Ministers have granted approval to escalate the Value Added Tax (VAT) rate up to 18% w.e.f. 01 January 2024. In accordance with Section 2A of the Value Added Tax Act No. 14 of 2002 and Amendments thereto (VAT Act), the Minister of Finance is empowered to vary the tax rates specified in the VAT Act via a Gazette Notification.
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- September 13th 2023 - A notification regarding the Cabinet Decisions dated 11 September 2023 has been published in the website of the Department of Government Information. As per the notification, the abolition of the Simplified Value Added Scheme (SVAT) which was proposed to come into effect on 01.01.2024 [as per the Value Added Tax (Amendment) Bill 2023 issued on 31.08.2023] has been deferred to 01.04.2025.
Download - September 9th 2023 - The Inland Revenue (Amendment) Act No 14 of 2023 was certified by the Speaker on 08 September 2023 and will be effective from 01 April 2023.
Download - September 9th 2023 - The Social Security Contribution Levy (Amendment) Act No 15 of 2023 has been certified by the Speaker on 08 September 2023. Certain new exemptions have been included by amending the First Schedule to the Act.
Download - September 5th 2023 - Please find attached herewith the following forms uploaded in the Department of Inland Revenue (DIR) website in relation to Advance Personal Income Tax (APIT):-
Download 1 | Download 2 | Download 3 - September 2nd 2023 - A Bill to amend the Value Added Tax Act No. 14 of 2002 has been ordered to be published by the Minister of Finance, Economic Stabilization and National Policies in the Government Gazette on 31 August 2023.
Download - July 31st 2023 - As per Section 86 (8) of the Inland Revenue Act (IRA) No 24 of 2017 and Amendments thereto, a Withholding Agent (WHA) who makes payments under Section 84A is required to file Quarterly Advance Income Tax (AIT) Statements.
Download - July 20th 2023 - A Bill to amend the Inland Revenue Act, No. 24 of 2017 has been ordered to be published by the Minister of Finance, Economic Stabilization and National Policies in the Government Gazette. This Bill has been issued based on the Cabinet approval granted to facilitate the local debt optimization process. The effective date of the below is 01 April 2023 (subject to the enactment of the Bill).
Download - July 7th 2023 - A Bill to amend the Social Security Contribution Levy Act, No. 25 of 2023 has been ordered to be published by the Minister of Finance, Economic Stabilization and National Policies in the Government Gazette. The Bill seeks to provide certain new exemptions by amending the First Schedule to the Act.
Download - June 22nd 2023 - The Department of Inland Revenue has issued Notice No. PN/IT/2023-03 on Taxpayer Registration under Section 102 (3) of the Inland Revenue Act No 24 of 2017 and Amendments thereto (IRA).
Download - June 01st 2023 - As per Section 102 (3) of the Inland Revenue Act No 24 of 2017 and Amendments thereto (IRA), the Minister of Finance with the consent of the CGIR may specify additional classes of persons to registered under the IRA. Accordingly, the Gazette Notification No 2334/21 dated 31 May 2023 has been issued prescribing the following additional classes of persons who are required to register under the IRA.
Download - May 11th 2023 - The Inland Revenue (Amendment) Act No 04 of 2023 was certified by the Speaker on 08 May 2023. The Act will come into operation with effect from specific dates referred to under specific sections in the attached Tax Alert.
Download - April 12th 2023 - The Department of Inland Revenue has issued a new Circular No. SEC/2023/E/02 on the quantification of certain amounts for benefits in calculating employment income, dated 06th April 2023 which was made available to the public on 12th April 2023. This circular will be effective from 01st April 2023.
Download - March 23rd 2023 - Please find attached herewith the Circular No SEC/2022/E/06 (Revised) dated 17 March 2023 (made available on 22 March 2023), issued by the Department of Inland Revenue on the Requirement of Tax Clearance for foreign outward remittances and related procedure.
Download - March 19th 2023 - A Bill to amend the Inland Revenue Act, No. 24 of 2017 has been ordered to be published by the Minister of Finance, Economic Stabilization and National Policies in the Government Gazette. This Bill seeks to amend the Principal Inland Revenue Act No.24 of 2017 introduced w.e.f. 01 April 2018. Prior to this the Principal Act has been amended by Amendment Act No. 10 of 2021 and Amendment Act No.45 of 2022.
Download - February 14th 2023 - Circular No. SEC/2023/01 dated 14 February 2023 issued by the Department of Inland Revenue on the Application of Withholding Tax/Advance Income Tax.
Download - February 09th 2023 - Significant points to observe with regard to the revised Circular No. SEC/2022/E/05 (Revised) dated 07.02.2023, issued by the Department of Inland Revenue in relation to Employment Benefit Valuation.
Download - February 08th 2023 - Circular No. SEC/2022/E/05 (Revised), dated 07.02.2023 on the quantification of non-cash benefits, which has been published in the Department of Inland Revenue website. This seeks to annul the previous Circular No. SEC/2022/E/05 dated 22.12.2022. The circular states that if an employee's non-cash benefit was calculated for the month beginning January 1, 2023, in a manner not in accordance with the revised attached circular, the difference in the APIT deduction should be adjusted in the succeeding months.
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2022
- December 31st 2022 - Circular No SEC_2022_E_06 dated 23 December 2022 issued by the Department of Inland Revenue on Requirement of Tax Clearance for Foreign Outward Remittances and related Procedure with effect from 01 January 2023.
Download - December 29th 2022 - Circular No SEC/2022/E/03 dated 23 December 2022 issued by the Department of Inland Revenue to the Withholding Agents on the deduction of Withholding Tax & Advance Income Tax with effect from 01 January 2023.
Download - December 26th 2022 - The Department of Inland Revenue has issued the Advance Personal Income Tax (APIT) Tables applicable for the period 01 January 2023 to 31 March 2023.
Download 1 | Download 2 - December 26th 2022 - Circular No SEC/2022/E/02 dated 20 December 2022 issued by the Department of Inland Revenue for the Banks and Financial Institutions on the deduction of Advance Income Tax on Interest or Discount on Deposits with effect from 01 January 2023.
Download - December 21st 2022 - The Inland Revenue (Amendment) Act No 45 of 2022 was certified by the Speaker on 19thDecember 2022. The Act will come into operation with effect from specific dates referred to under specific sections.
Download Report - December 16th 2022 - The Value Added Tax (Amendment) Act No 44 of 2022 was certified by the Speaker on 14 December 2022. The Act will come into operation with effect from specific dates referred to under specific sections.
Download Report - November 21st 2022 - The Supreme Court (SC) Special Determinations under Article 120 and 121 of the Constitution in relation to the Inland Revenue (Amendment) Bill and Value Added Tax (Amendment) Bill have been issued and the Determinations impact the effective date of the amendments proposed in the Bills. We have tabulated below the effective dates that were provided in the respective two Bills and the new effective dates in the proposed Committee Stage Amendments set out in the SC Special Determinations.
Download Report - October 12th 2022 - The Inland Revenue (Amendment) Bill amending the Law applicable on Income Tax was published in the Gazette issued on 11 October 2022. This tax alert provides a snapshot of key Income Tax changes proposed in the Bill.
Download Report - October 11th 2022 - It was proposed in the Interim Budget 2022 to increase the rate of VAT on the import and/or supply of goods or supply of services to 15% from 01 September 2022. Attached notifications published in the websites of Ministry of Finance and Department of Inland Revenue in relation to the increase of the VAT rate.
Download Report | Download Notification 1 - September 21st 2022 - The Social Security Contribution Levy (SSCL) Act No 25 of 2022 was certified by the Speaker on 20 September 2022.
Download Report - August 31st 2022 - It was proposed in the Interim Budget 2022 to increase the rate of VAT on the import and/or supply of goods or supply of services to 15% from 01 September 2022. Attached notifications published in the websites of Ministry of Finance and Department of Inland Revenue in relation to the increase of the VAT rate.
Download Report | Download Notification 1 | Download Notification 2 - July 05th 2022 - The Circular No: SEC/2022/E/01 on the extension of time for payment of Income Tax was published by the Inland Revenue Department on 27 June 2022. The Circular sets out the procedure for any person who wishes to apply for the extension of time of payment of income tax under Section 151 Inland Revenue Act, No. 24 of 2017 (IRA).
Download Report - June 23rd 2022 - The Bill governing the imposition and administration of the Social Security Contribution Levy (SSCL) was published in the Gazette on 21 June 2022. The SSCL is a new tax proposed in the Budget 2022.
Download Report - June 01st 2022 - Value Added Tax increased revisions in effect from June 01, 2022.
Download Report - April 08th 2022 - The Surcharge Tax Act No 14 of 2022 (Act) was certified by the Speaker and published as a Supplement to Part II of the Gazette of the Democratic Socialist Republic of Sri Lanka on 08 April 2022.
Download Report - February 18th 2022 - The Bill published in the Gazette on 22 November 2021 to amend the Provincial Councils (Transfer of Stamp Duty) Act No.13 of 2011 was passed into law on 17 February 2022 with the title Provincial Councils (Transfer of Stamp Duty) (Amendment) Act, No. 6 of 2022.
Download Report - February 08th 2022 - The Bill governing the imposition and administration of the Surcharge Tax was published in the Gazette on 07 February 2022. The Surcharge Tax was proposed in the Budget 2022, as a one-time tax.
Download Report - February 03rd 2022 - We enclose herewith the Gazette notification No. 2258/18 dated 14 December 2021 issued by the Inland Revenue Department on 1st February 2022 under the Sixth Schedule, Paragraph 10 (2) (c) and (e) of the Inland Revenue Act, No. 24 of 2017 amended by the Inland Revenue (Amendment) Act, No. 10 of 2021 (the IRA).
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2021
- July 19th 2021 - The Department of Government Printing has uploaded Gazette Extraordinary No. 2217/7 dated 2nd March 2021 issued under the Inland Revenue Act No. 24 of 2017 (the Act), which would be effective from 1 April 2020.
Download Report - May 13th 2021 -The Inland Revenue (Amendment) Act No. 10 of 2021 was passed in Parliament and certified by the Speaker on 13th May 2021. Below document is a synopsis of the key changes proposed via the Amendment Act, compared to the Bill published previously.
Download Report - May 13th 2021 - The Value Added Tax (Amendment) Act No. 9 of 2021 was passed in Parliament and certified by the Speaker on 13th May 2021. Below document is a synopsis of the key changes proposed via the Amendment Act compared to the Bill published previously.
Download Report - April 9th 2021 - The Bill to amend the Inland Revenue Act No. 24 of 2017 has been published.
Download Report - April 9th 2021 - The Bill to amend the Value Added Tax Act No. 14 of 2002 has been published.
Download Report - January 13th 2021 - The Department of Inland Revenue (“DIR”) has issued the attached notice indicating the proposed amendments to the Inland Revenue Act No. 24 of 2017 (“IR Act”) to be implemented by them post formal amendments to the IR Act.
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2020
- December 23rd 2020 - The Department of Inland Revenue (“DIR”) has informed all tax payers that due to the prevailing situation in the country consequent to the outbreak of COVID-19, a further extension has been granted until 31st January 2021 for filing the Annual Statement of Employer (PAYE Tax) and Annual Statement of Withholding Tax for the Year of Assessment 2019/2020.
Download Report - November 3rd 2020 - The Department of Inland Revenue (“DIR”) has informed all tax payers that due to the prevailing situation in the country consequent to the outbreak of COVID-19, an extension has been granted until 28th February 2021 for filing the Return of Income for the Year of Assessment 2019/2020.
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- August 11th 2020 - The Department of Inland Revenue (“DIR”) has published a notice stating that with effect from 1st April 2020, it is mandatory for employers to deduct tax under the Advance Personal Income Tax (“APIT”) Scheme, on payment of remuneration to employees who are resident non-citizens of Sri Lanka. Such tax deducted has to be remitted to the DIR by 15th August 2020. Previously, APIT was compulsory for non-resident employees only.
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- June 26th 2020 - An update on the decisions taken by the Cabinet of Ministers on the 24th of June 2020 for granting tax relief to Small and Medium Scale Entrepreneurs who have been adversely impacted due to COVID-19.
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- May 18th 2020 - An update on the recent notices issued by the Department of Inland Revenue in relation to an extension granted for submission of the Statement of Estimated Tax Payable for the year of assessment 2019/2020, extension for remittance of taxes withheld on terminal benefits, instructions for collection of credit voucher books by Registered Identified Purchasers (“RIPs”) under the SVAT Scheme and further guidelines for making online tax payments.
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- May 5th 2020 - An update on the recent notices issued by the Department of Inland Revenue providing instructions to be followed by taxpayers in computing income tax payable and making tax payments for the year of assessment 2019/2020.
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- April 30th 2020 - An update on the recent notice issued by the Department of Inland Revenue granting a further extension of the validity periods for VAT deferment facility related letters and Temporary VAT registration, and the updated notice issued in relation to online tax payments.
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- April 27th 2020 - An update on the revised notice issued by the Department of Inland Revenue in relation to deduction of tax on cumulative income earned from employment by employees for the period 1st January 2020 to 31st March 2020, under the PAYE Scheme.
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- April 22nd 2020 - An update on the notice issued by the Department of Inland Revenue, in relation to extension of deadlines for submission of tax returns/ statements/ forms.
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- April 22nd 2020 - An update on the notice and tax tables issued by the Department of Inland Revenue, in relation to deduction of Advance Personal Income Tax from remuneration paid to employees.
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- April 20th 2020 - An update on the notice issued by the Department of Inland Revenue informing the extension of deadline for making appeals to the Tax Appeals Commission and providing directions to taxpayers for lodging such appeals via email.
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