Explained: 9 key changes under Sri Lanka’s new VAT law

The Value Added Tax (Amendment) Act No. 14 of 2026 has been officially certified by the Speaker and published in the Gazette, retaining the annual VAT registration threshold at Rs. 60 million. The Act was certified by the Speaker on June 30 and gazetted on July 3. One of the key…

The Value Added Tax (Amendment) Act No. 14 of 2026 has been officially certified by the Speaker and published in the Gazette, retaining the annual VAT registration threshold at Rs. 60 million. The Act was certified by the Speaker on June 30 and gazetted on July 3. One of the key changes from the original VAT (Amendment) Bill is that the Act does not reduce the mandatory VAT registration threshold to Rs. 36 million per annum, as initially proposed. Instead, the threshold remains at Rs. 60 million per annum. Under the new law, foreign digital service providers such as streaming platforms, cloud computing services, online advertising platforms, app stores, software providers and other digital businesses supplying services to customers in Sri Lanka must register for VAT if their supplies exceed Rs. 60 million in 12 months or Rs. 15 million in a quarter. However, services supplied to VAT-registered businesses in Sri Lanka (B2B transactions) are exempt from VAT. The observation was highlighted in an analysis by KPMG Tax Consultants following the enactment of the new law. (Newswire)