Tax Alerts and highlights

16 February 2026

Regulations have been issued under the Strategic Development Projects Act, No. 14 of 2008, prescribing the eligibility criteria for a project to be identified as a Strategic Development Project and the corresponding tax exemptions and concessions applicable thereto.

The Regulations, issued by Gazette No. 2474/66 dated 08 February 2026, set out the minimum investment thresholds, local employment requirements, and the duration of Corporate Income Tax exemptions applicable across specified sectors, including infrastructure, tourism, manufacturing, agriculture, and educational and technological establishments.

The Regulations further provide for exemptions from Customs Import Duty (CID), VAT, PAL and CESS during the project implementation period for the importation of capital goods and construction materials, subject to specified conditions.

This alert summarises the key provisions introduced by the Regulation.

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04 March 2026

The Social Security Contribution Levy (SSCL) Amendment Bill was issued on 03 March 2026 proposing amendments to the Social Security Contribution Levy Act, No. 25 of 2022, as amended.

The Bill proposes revisions to the turnover registration threshold and related registration timelines, as well as the threshold for cancellation of SSCL registration, with changes proposed to take effect from 01 April 2026.

The Bill also proposes amendments to the exemption schedule, including changes to the treatment of motor vehicles for SSCL purposes.

It should be noted that the proposed amendments will only take legal effect once the Bill is passed in Parliament and certified by the Speaker.

This alert summarises the key proposals contained in the SSCL Amendment Bill 2026.

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02 January 2026
The Social Security Contribution Levy (Amendment) Act No. 24 of 2025 was certified by the Speaker on 17 December 2025, introducing amendments to the existing exemptions under the Social Security Contribution Levy Act, No. 25 of 2022, as amended.

The Amendment Act revises the First Schedule of the SSCL Act, including changes to exemptions relating to specified goods and services, with effect from various dates.

This alert outlines the key amendments introduced under the Act.

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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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Employee TIN Requirement for Employer’s APIT Annual Statement

13 March 2026

The Inland Revenue Department (IRD), by Notice SEC/PN/APIT/2026-01 dated 24 February 2026 and published on the IRD website on 12 March 2026, has introduced a mandatory requirement for employers registered for Advance Personal Income Tax (APIT) to include the Taxpayer Identification Number (TIN) of each employee in Schedule 01 (tax liable employees) of the APIT Annual Statement.

This requirement will apply from the Year of Assessment (Y/A) 2025/2026. Employers are required to submit the APIT Annual Statement to the IRD by 30 April 2026.

The IRD has further indicated that any APIT Annual Statement submitted without the TIN details of employees will be rejected. In addition, employees will not be entitled to claim the APIT credit in their Individual Income Tax Return where the TIN is not included in the statement.

This alert outlines the key requirements introduced by the IRD notice.

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03 March 2026
The Inland Revenue (Amendment) Bill was issued on 24 February 2026 proposing several amendments to the Inland Revenue Act No. 24 of 2017.
The Bill proposes revisions across a range of areas including Capital Gains Tax rates, taxation of unit trusts, tax treatment of life insurance businesses, and the calculation of deductible financial costs. It also introduces amendments relating to enhanced capital allowances, withholding tax provisions, tax residency rules, and administrative requirements such as Taxpayer Identification Number (TIN) registration and return filing obligations.

Further proposals include revisions to instalment tax payment calculations, expanded definitions for specified service providers subject to withholding tax, and new provisions relating to tax administration, compliance, and recovery procedures.

It should be noted that the proposed amendments will only take legal effect once the Bill is passed in Parliament and certified by the Speaker.

This alert provides an overview of the key proposals contained in the Inland Revenue (Amendment) Bill.

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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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