Tax Alerts and highlights

12 December 2025

The implementation date of the new tax invoice format introduced under the Value Added Tax Act, No. 14 of 2002, has been deferred from 01 January 2026 to 01 April 2026.

This deferment was announced by the Inland Revenue Department through Notice PN/VAT/2025-12/1 dated 12 December 2025, to allow VAT-registered persons additional time to carry out the necessary transitional arrangements.
Apart from the revised implementation date, all other requirements of the new tax invoice format, as communicated in Deloitte’s tax alert dated 03 December 2025, remain unchanged.

03 December 2025

Extraordinary Gazette Notification No. 2463/05 dated 17 November 2025 (issued on 03 December 2025) introduces the updated requirements for tax invoices issued under Section 20 of the Value Added Tax Act, No. 14 of 2002, as amended.

The new format, effective from 01 January 2026, provides detailed specifications on mandatory invoice information, layout, record-keeping obligations, and additional considerations relevant to suppliers and purchasers.

This alert outlines the key changes and compares the new requirements with the previous format.

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28 November 2025

The statutory deadline for filing the return of income for the Year of Assessment 2024/2025 under the Inland Revenue Act, No. 24 of 2017, remains 30 November 2025.

However, in view of the adverse weather conditions caused by Cyclonic Storm “Ditwah,” the Commissioner General of Inland Revenue has announced that returns filed on or before 08 December 2025 will not be subject to late-filing penalties.

This alert also highlights that, under Section 135(2) of the IRA, the statutory time bar for issuing an amended assessment will be 30 months from the date of filing the return.

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07 November 2025

The Strategic Development Projects (Amendment) Bill, issued on 07 November 2025, introduces key revisions to the framework governing the identification, approval, and monitoring of Strategic Development Projects (SDPs) in Sri Lanka.

The Amendment outlines new procedures for project designation, eligibility criteria, tax holiday commencement, and ongoing compliance obligations. It also limits the maximum exemption period to ten years and strengthens the monitoring and reporting requirements for designated projects.

This alert provides a synopsis of the main changes introduced under the Amendment Bill.

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11 September 2025

The Simplified VAT (SVAT) mechanism will be repealed with effect from 01 October 2025. All existing Registered Identified Purchaser (RIP) and Registered Identified Supplier (RIS) registrations will be cancelled, with taxpayers required to operate under the standard VAT framework going forward. The Inland Revenue Department has issued detailed guidance on the activities and deadlines to be met during this transition.

09 September 2025

The effective date for VAT on digital services supplied by non-resident persons has been deferred from 01 October 2025 to 01 April 2026. The deferment, announced via Cabinet decision on 03 September 2025, provides non-resident suppliers with additional time to implement the necessary transition measures.

06 July 2025

Supply of services by a non – resident person on electronic platform, will become liable for VAT with effect from 01 October 2025.

In this regard, the outline of the procedure for collection and payment of VAT has been issued under Gazette Notification no. 2443/30 dated 01 July 2025.

This alert summarizes the salient requirements thereunder. 

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15 December 2023

The Value Added Tax Amendment Act No.32 of 2023 (VAT Amendment Act) was certified by the Speaker on 13 December 2023. This Amendment Act provides for significant revisions to the VAT exemption schedule.

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11 September 2023

In light of the measures undertaken by the government to improve the economic stability of Sri Lanka, the Domestic Debt Optimisation (DDO) programme was approved in July 2023. This includes conversion/exchange of treasury bonds currently issued to Employees’ Trust Fund (ETF), an approved provident or pension fund, or an approved termination fund to new treasury bonds.

A further amendment is made to the Inland Revenue Act No.24 of 2017 as amended (IRA), to encourage the exchange of the existing treasury bonds.

This alert details the provisions relating to this amendment as provided in the Inland Revenue (Amendment) Act No. 14 of 2023 certified by the Speaker on 08 September 2023. The provisions of the Amendment Act are deemed to come into operation on 01 April 2023.

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11 September 2023

SSCL was implemented on 1 October 2023. An amendment to the SSCL Act has been made under the SSCL (Amendment) Act No. 15 of 2023 which came into effect on 08 September 2023.

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