Gazette issued on VAT amendments effective from July 1

Colombo, May 3 (Daily Mirror) - The Gazette notification outlining amendments to the Value Added Tax (VAT), scheduled to take effect from July 1, has been issued by the Ministry of Financial Planning and Economic Development.

According to the Gazette, VAT will be imposed on services provided through electronic platforms starting from the effective date, marking a significant step towards expanding the tax net to cover digital services.

In addition, measures have been introduced to revise the threshold for VAT registration under Section 10 of the Principal Act. Accordingly, any person whose total value of taxable supplies of goods, services, or both within a taxable period exceeds Rs. 9 million will be required to register for VAT.

The amendments also propose an increase in VAT on financial services, raising the rate from 18 percent to 20.5 percent.

Furthermore, provisions have been included to facilitate the registration and payment of taxes related to digital services, ensuring better compliance within the evolving digital economy.