IRD seeks to tax non-resident service providers who surpass Rs. 60 million yearly threshold

Colombo, July 7 (Daily Mirror) - The Inland Revenue Department (IRD) has announced that all non-resident persons who provide services to customers in Sri Lanka through electronic platforms must register for Value Added Tax (VAT) if their earnings exceed a specified limit.

According to the Gazette notification issued listing the digital services subject to an 18 percent VAT, registration is compulsory if the total value of services supplied exceeds Rs. 60 million within the last 12 months or Rs. 15 million within the last three months, as outlined in the VAT Act.

Non-resident service providers are also required to collect and remit VAT to the IRD by the 20th of the month following the end of each taxable period.

In addition, they must submit VAT returns on a quarterly basis, no later than the last day of the month after each taxable period ends.

Before registering for VAT, non-resident persons must first obtain a Taxpayer Identification Number (TIN). Both the TIN application and VAT registration can be completed online via the IRD’s official website at www.ird.gov.lk.

This move is part of the government’s effort to ensure fair tax contributions from overseas digital service providers operating within Sri Lanka’s expanding digital economy.