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IRD Income Tax Tables in Sri Lanka for 2023-2024

Income tax was first introduced in Sri Lanka in 1932. Over the years, taxation has undergone several policy changes including the introduction of new surcharges, taxes and levies. There are many forms of taxes in Sri Lanka including income tax, Pay as You Earn (PAYE), Simplified Value Added Tax (SVAT), Social Security Contribution Levy (SSCL), capital gains tax, stamp duty, Nation Building Tax (NBT).

The taxation system in Sri Lanka is administered by the official tax body, the Inland Revenue Department (IRD). The Online Tax Payment Platform (OTPP) has been introduced to enable taxpayers to make tax payments online.

The Inland Revenue Act No. 24 of 2017 provides guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these tax tables and the corresponding tax brackets and tax rates, for effective tax planning and to remain compliant with the tax laws in Sri Lanka.

Here you will learn more about:

Headline Tax Rates in Sri Lanka

Headline Tax Rates

Tax Rate (%)

Headline Personal Income Tax (PIT) Rate

36

Headline Corporate Income Tax (CIT) Rate

30

Personal Income Tax (PIT) Tables for Individuals in Sri Lanka 2023-2024

Resident and non-resident individuals may be able to access specified reliefs and should check with the IRD as to the reliefs made available. 

A taxpayer should also be aware of a tax on terminal benefits from employment. This covers several types of income such as amounts received in commutation of a pension, as a retiring gratuity, or as payment at or before the time of retirement from employment as a result of the Employees’ Trust Fund laws.

Personal Income Tax (PIT) Rates for Individuals

Taxable Income (LKR/Rs)

Tax Rate (%)

First Rs. 500,000/-

6%

Next Rs. 500,000/-

12%

Next Rs. 500,000/-

18%

Next Rs. 500,000/-

24%

Next Rs. 500,000/-

30%

On the Balance

36%

Gains from realization of investment assets

10%

Income from a business consisting of betting and gaming, manufacture and sale or import and sale of any liquor or tobacco product

40%

Corporate Income Tax (CIT) Rates in Sri Lanka 2023-2024

Standard Corporate Income Tax (CIT) Rates

Taxable Income (LKR/Rs)

Tax Rate (%)

Taxable income of a company (Other than companies taxed at special rates)

30%

Special Corporate Income Tax Rates

Special Corporate Income Tax (CIT) Rates

Description

Tax Rate (%)

Gains and profits from conducting betting and gaming

40%

Gains and profits from manufacture and sale or import and sale of any liquor or tobacco products

40%

Gains from the realization of Investment Assets

30%

Income Tax (IT) Payment Dates

Income Tax (IT) Due Dates

Instalment

Payment Date

1st Instalment

On or before the 15th day of the month of August, of that year of assessment

2nd Instalment

On or before the 15th day of the month of November, of that year of assessment

3rd Instalment

On or before the 15th day of the month of February, of that year of assessment

4th Instalment

On or before the 15th day of the month of May, of the next succeeding year of assessment

Final Instalment

On or before the date that is after six months end, of that year of assessment

For more information on income tax filing dates for 2024 visit Sri Lanka’s Inland Revenue Department 2024 Tax Calendar.

Capital Gains Tax (CGT) in Sri Lanka

Capital gains tax (CGT), typically set at 10%, is levied on gains realized on the transfer of ownership including a sale, transfer, redemption, destruction, expiry or loss of an investment asset. 

However, certain investment assets are exempt from CGT:

  • an individual’s principal place of residence
  • quoted shares listed on the Colombo Stock Exchange

Withholding Tax (WHT) Rates in Sri Lanka

The existence of double taxation treaties (DTTs) between Sri Lanka and several other countries means that there are variable WHT rates applicable on payments to non-residents. While three categories of payments are referred to below, WHT may also be payable in respect of:

  • payments for land, sea, air transport or telecommunication services
  • payments for the sale of any gem sold at an auction conducted by the National Gem & Jewellery Authority
  • payments for service fees to a resident individual who is not an employee of the payer
  • payments for rent to a resident person
  • payments for winnings from a lottery, reward, betting or gambling

Withholding Tax (WHT) Rates

WHT (%)

Dividends

Interest

Royalties

15

5

14

Value-Added Tax Rates in Sri Lanka

Value-Added Tax (VAT)

Date

Tax Rate (%)

Standard VAT

From 01.09.2022 to 31.12.2023

15

From 01.01.2024

18

Supply of services by a hotel, guest house, restaurant or other similar businesses providing similar services, registered with the Sri Lanka Tourism Development Authority, if not less than sixty per centum (60%) of the total value of the inputs are sourced from local supplies/sources

From 01.09.2022 to 31.12.2023

15

From 01.01.2024

18

VAT on Financial Services (On the Value Addition on Financial Services)

With effect from 01.01.2022

18

Direct export of goods & supply of certain services referred to in section 7 of the VAT Act (Zero rated supplies).

0

Import of goods (fabrics) set out in the H.S. Code and description specified in Column I and II of Schedule of the Extraordinary Gazette Notification No. 2095/20 dated November 1, 2018.

0

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