The Inland Revenue Department has reassured migrant workers that transferring legally earned overseas income through formal banking channels does not incur automatic taxation, urging them to avoid informal remittance methods.
The Inland Revenue Department (IRD) has moved to dispel concerns among Sri Lankan migrant workers regarding taxation on overseas remittances, clarifying that no separate tax is levied simply for transferring foreign earnings through the banking system.
Speaking on the Ada Derana "BIG FOCUS" programme, Senior Deputy Commissioner Hiran Meneripitiya explained that whether overseas income faces taxation depends on an individual's tax residency status for the relevant year of assessment. Those classified as tax residents may be liable to tax on both domestic and foreign earnings, while non-residents of Sri Lanka for tax purposes would not face income tax on money earned outside the country.
Meneripitiya stressed that migrant workers should feel confident using formal banking channels to remit their legally earned foreign income without fearing automatic taxation. He emphasized that the act of transferring money into Sri Lanka through banks does not trigger a separate tax charge, and encouraged workers to legally channel their overseas earnings into domestic investments rather than relying on informal or illegal transfer methods.
The IRD official underscored that tax residency status remains the determining factor in assessing whether overseas income is subject to Sri Lankan taxation, not the remittance method itself. By clarifying this distinction, the department aims to encourage migrant workers to use transparent, regulated banking systems for their remittances.
