Sri Lanka raises its standard VAT rate from 15% to 18% from 1 January 2024
This page records one dated change. For the rules in Sri Lanka as they stand today, see the Sri Lanka guide →
- Jurisdiction
- Sri Lanka
- Tax
- VAT
- Change type
- Rate change
- Status
- In force
- Impact
- FYI
- Announced
- 20 March 2024
- Effective
- 1 January 2024
- Instrument
- LK-ACT-Act-No-16-of-2024
- Authority
- Inland Revenue Department, Sri Lanka
- Verified
- Fetched from official source · high confidence
All VAT-registered persons in Sri Lanka charging the standard rate.
No action required — monitoring only. The 18% rate has been in force since 1 January 2024.
The Value Added Tax (Amendment) Act No. 16 of 2024 (certified 20 March 2024, published as a Gazette supplement on 22 March 2024) amended section 2 of the VAT Act No. 14 of 2002. The 15% standard rate now applies only to taxable periods ending by 31 December 2023, and for any taxable period beginning on or after 1 January 2024 the rate is 18% (tax fraction 9/59), so the Act confirms the 18% rate back to 1 January 2024.
What changed in detail
The Value Added Tax (Amendment) Act, No. 16 of 2024 was certified on 20 March 2024 and published as a supplement to the Gazette on 22 March 2024. Section 2 amends section 2 of the Value Added Tax Act, No. 14 of 2002, which sets the rate.
- The 15% rate (tax fraction 3/23), which applied to taxable periods starting on or after 1 October 2022, is closed: it now covers taxable periods “commencing on or after October 1, 2022 but ending on December 31, 2023”.
- A new item (ix) sets the rate at 18% (tax fraction 9/59) for any taxable period commencing on or after 1 January 2024.
The Act was certified almost three months after the date from which the 18% rate applies, so it confirms the rate back to 1 January 2024.
What it means
The 18% standard rate is still in force in November 2026; the weekly feed records no later change to it, and the same 18% rate was applied to digital services supplied by non-resident providers from 1 July 2026.
The tax fraction matters as much as the headline rate: VAT inside a VAT-inclusive price is 9/59 of that price, not 18%. Systems that back VAT out of gross receipts should use 9/59 for periods from 2024 and 3/23 for earlier periods.
Proof
for any taxable period commencing on or after January 1, 2024 at the rate of eighteen per centum (of which the tax fraction is 9/59).
Source snapshot of the official page. Open full size ↗Archived from the official distribution · Value Added Tax (Amendment) Act, No. 16 of 2024 (English text), certified 20 March 2024 · www.ird.gov.lk