Sri Lanka: VAT on nonresident digital service providers effective July 1, 2026, other VAT amendments
Including increased 20.5% VAT rate on financial services rate effective July 1, 2026
Legislation introducing the following VAT amendments was issued on April 29, 2026:
- New annual VAT registration threshold of LKR 36 Mn (reduced from LKR 60m)
- Increased 20.5% VAT rate on financial services rate effective July 1, 2026
- VAT on nonresident digital service providers effective July 1, 2026
Read a May 2026 report prepared by the KPMG member firm in Sri Lanka