- The President of Sri Lanka has proposed significant tax reforms for 2025, including the introduction of a VAT levy on foreign providers of digital services, which is set to take effect on April 1, 2025, requiring these providers to charge, collect, and remit VAT on services supplied to Sri Lankan customers.
- In an effort to equalize the service market and following discussions with the IMF, the government aims to impose an 18% VAT rate on digital services provided by non-resident providers, aligning Sri Lanka with other Asian countries that have implemented similar regulations.
- The implementation of this VAT obligation will necessitate the creation of a new technical framework for tax registration, collection, and remittance, potentially leading to increased service prices for consumers and compliance costs for service providers, prompting taxable entities to review their VAT compliance requirements in light of these upcoming changes.
Source 1stopvat
