Sri Lanka Tax Rates
Sri Lanka operates a progressive income tax system with rates from 6% to 36%, administered by the Inland Revenue Department. The standard corporate tax rate is 30%, and VAT is 18%. Sri Lanka significantly revised its tax system in 2022-2023 as part of IMF-supported fiscal reforms following the economic crisis, raising rates across the board to restore fiscal sustainability.
Top Income Tax Rate
36%
Corporate Tax Rate
30%
VAT / Sales Tax
18%
Capital Gains Tax
10%
Detailed Tax Information
Income Tax Brackets
Sri Lanka's personal income tax applies progressive rates from 6% to 36%. A personal relief of LKR 1.2 million applies. These rates were significantly increased from January 2023 as part of IMF-supported fiscal reforms. Residents are taxed on worldwide income while non-residents are taxed on Sri Lankan-sourced income.
| Income Range | Tax Rate |
|---|---|
| Rs 0 – Rs 1.2M | 6% |
| Rs 1.2M – Rs 1.7M | 12% |
| Rs 1.7M – Rs 2.2M | 18% |
| Rs 2.2M – Rs 2.7M | 24% |
| Rs 2.7M – Rs 3.2M | 30% |
| Rs 3.2M+ | 36% |
Corporate Tax
Sri Lanka's standard corporate income tax rate is 30%. Certain sectors pay different rates: 14% for exports and qualifying education and healthcare, 40% for gambling and liquor. Small and medium enterprises with annual turnover below LKR 500 million and the concessionary rate of 14% applies to specific promoted sectors.
Standard Rate
30%
Capital Gains Tax
Capital gains on the realization of investment assets are taxed at 10%. This includes gains from the sale of real property, shares, and other investment assets. Capital gains on listed shares disposed after a minimum holding period may benefit from reduced treatment.
Rate
10%
VAT / Sales Tax
Sri Lanka's VAT was increased to 18% from January 2024 (from 15%). Essential goods including rice, bread, and healthcare are exempt. The threshold for mandatory registration was reduced to improve compliance.
Standard Rate
18%
Cryptocurrency Tax
Sri Lanka has not introduced specific cryptocurrency regulations or tax rules. The Central Bank of Sri Lanka has warned against cryptocurrency but has not banned it. Crypto gains may be subject to standard income tax provisions.
Tax Treaties
Sri Lanka has approximately 47 double taxation agreements, reflecting its trade relationships with South Asian, East Asian, and Western partners.
Treaty Network
47
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Sri Lanka
See how much you could save by moving here from your current country.
+$10K
Tax in United States
$24K
24.4% effective
Tax in Sri Lanka
$14K
14.0% effective
You Save
42.5%
less tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
