Sri Lanka: Legislation introducing various income tax changes enacted
The KPMG member firm in Australia has summarized and analyzed the budget announcements and its implications for various sectors and businesses.
Legislation introducing the following income tax changes that was published on February 21, 2025 (read TaxNewsFlash), was enacted as the Inland Revenue (Amendment) Act No. 02 2025, certified by the Speaker on March 20, 2025, and will become effective April 1, 2025:
- Introduction of concessionary corporate income tax rate of 15% on foreign service providers
- Increase in corporate income tax (CIT) rate from 40% to 45% on gains and profits from betting and gaming, manufacture and sale or import of any liquor or tobacco products
- Increase in rate of advance income tax (AIT) on interest from 5% to 10%
- Reduction in time period to claim income tax refund or credit to 30 months
- Various individual (personal) income tax changes
Read a March 2025 report prepared by the KPMG member firm in Sri Lanka