Sri Lanka
Sri Lanka: 3 company types, its taxes, banking and business environment, and what it is known for.
Forming a company
Company types in Sri Lanka
The 3 forms a founder can choose here, each with its own figures. Open one for its sources.
What it is known for
Where Sri Lanka is in the world’s top 10 on a measure anyone can check, the best rank first. Only the top is shown; a low rank is never stated.
- World’s2ndWorld-leading exports Tea, whether or not flavouredUS$1.4 bn · 18.2% of world exports of 188 exporters · 2024 CEPII BACI, January 2026 release See the top 10
- World’s2ndWorld-leading exports Gloves, mittens and mitts, knitted or crochetedUS$409 m · 7.6% of world exports of 179 exporters · 2024 CEPII BACI, January 2026 release See the top 10
A rank is among everything the source reports for that year, so it moves when the source adds or drops economies. Exports include goods passing through for re-export. Nothing here is a recommendation.
Doing business here
Business accounts
Providers whose own published list of countries names Sri Lanka. A listing means a company formed here may apply, not that it will be accepted.
Not in our records No provider's country list has been read for Sri Lanka.
EU listings
Two lists a bank checks when it opens an account for a company or its owner.
- EU high-risk third countries (AML)
- Not listed
- EU non-cooperative jurisdictions for tax purposes
- Not listedOfficial EUR-Lex, 52026XG01465, Annex I as of 2026-02-17
Official sites
The authorities’ own sites for Sri Lanka: where to register, file and check.
Blocs and agreements
The trade arrangements Sri Lanka belongs to, as each arrangement’s own texts state them: since when, and what each covers. What a membership means for a business is for you to judge.
- South Asian Free Trade Area
- Free trade area · since 1 January 2006
Covers goods.
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Member States comprising the People's Republic of Bangladesh, the Kingdom of Bhutan, the Republic of India, the Republic of Maldives, the Kingdom of Nepal, the Islamic Republic of Pakistan and the Democratic Socialist Republic of Sri Lanka
- Regional Comprehensive Economic Partnership
- Has asked to join
Listed by the RCEP Support Unit among five economies that have submitted formal requests to accede; the page does not say any accession has been agreed.
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1 January 2022 Australia, Brunei Darussalam, Cambodia, China, Japan, Lao PDR, New Zealand, Singapore, Thailand, Viet Nam
Regional and customs arrangements only, 36 of them; bilateral trade agreements are not yet in our records.
Tax
Company tax
Tax, and what the company owes the registry each year.
- Corporate income tax
- 30%
- Distributions
- Not in our records
- Audit
- Appoints an auditor at each annual general meeting to audit the financial statements; the Act as read carries no size exemption on that sectionOfficial The registry or ministry page as of 2026-10-10
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A company shall at each annual general meeting,
- Small-company relief
- Not in our records
- Annual obligations
- Not in our records
- Annual registry fee
- LKR 7,900Official The registry or ministry page as of 2026-10-15
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For registration of an annual return 7,900.00
VAT
The tax on what the company sells in Sri Lanka, and when it must register, as the tax authority states it.
- The tax
- Value Added Tax (VAT)
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Value Added Tax (VAT) is introduced by the Act No.14 of 2002 and is in force from 1 st August, 2002.
- Standard rate
- 18%
The standard rate rose from 8% to 12% on 1 June 2022, to 15% on 1 September 2022 and to 18% from 1 January 2024.
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Standard Rate Prior to 01.06.2022 - 8% From 01.06.2022 to 31.08.2022 - 12% From 01.09.2022 to 31.12.2023 - 15% From 01.01.2024 - 18%
- Other rates
- 0% Exports of goods or services, and supplies by hotels, guest houses, restaurants and similar registered tourism businesses meeting the input condition
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Zero Rate (0%) Exports On Exports of goods or services, supply of services by a hotel, guest house, restaurant or other similar businesses providing similar services
- Registration threshold
- LKR 60,000,000
taxable supply of goods or services other than financial services, including wholesale and retail trade; 12 months, or Rs. 15 million for a quarter
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exceeds Rs. 15 million for a quarter, exceeds Rs. 60 million for 12 months period
- Voluntary registration
- Yes
Any person carrying on a taxable supply may apply for voluntary registration irrespective of the registration threshold.
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Voluntary Registration irrespective of the registration threshold any person who carries on or carries out a taxable supply can make an application for voluntary registration
- A foreign company
- See the note
The Inland Revenue Department lists 'Supply of service by Non-Resident person through electronic platform' among the supplies chargeable to VAT, but its VAT page states no threshold, first-supply or representative rule for such a supplier.
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Supply of service by Non – Resident person through electronic platform
- Returns filed
- Depends on the business
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Furnishing VAT Returns Due date : On or before the last day of the month after the expiry of each taxable period (may be monthly or quarterly)
- Tax authority
- Registration page read 2026-10-23
Tax calendar
When the main returns and payments fall due in Sri Lanka, tax year 2025/2026, as the tax authority states it.
- Corporate tax return
- 30 November · each year
the income tax return for the year of assessment is due on 30 November of the following year, eight months after the end of the year of assessment (31 March); the same date covers corporate, individual and partnership returns.
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30 2526 Income Tax Return - Y/A 2025/2026
- Corporate tax, final payment
- 30 November · each year
the final payment of income tax for Y/A 2025/2026 is due on 30 November 2026, the same date as the return, after the four quarterly instalments.
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30 25260 Income Tax - Final Payment of Y/A 2025/2026
- Corporate tax, instalments
- 15 August · each quarter
income tax is paid in four quarterly instalments on 15 August, 15 November, 15 February and 15 May; for Y/A 2026/2027 the first instalment and the Statement of Estimated Tax are due 15 August 2026, and the second instalment 15 November 2026. The rule records the first instalment.
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15 26271 Income Tax - 1st Installment of Y/A 2026/2027
- Personal income-tax return
- 30 November · each year
the individual's income tax return for the year of assessment is due on 30 November of the following year, the same date as the corporate and partnership returns.
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30 2526 Income Tax Return - Y/A 2025/2026
- Personal income tax, final payment
- 30 November · each year
the final payment of individual income tax for Y/A 2025/2026 is due on 30 November 2026, after the quarterly instalments and any APIT already paid.
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30 25260 Income Tax - Final Payment of Y/A 2025/2026
- Personal income tax, instalments
- 15 August · each quarter
individual income tax is paid in the same four quarterly instalments as corporate tax — 15 August, 15 November, 15 February and 15 May; the first instalment for Y/A 2026/2027 is due 15 August 2026 and the second 15 November 2026. The rule records the first instalment.
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15 26271 Income Tax - 1st Installment of Y/A 2026/2027
- VAT return
- 1 month after the end of the month · each month
the VAT return for a month is due by the last day of the following month (for example the October 2026 return is due 30 November 2026); the VAT payment for the period is due earlier, on the 20th of the following month. The rule records the last day of the month after the taxable month.
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30 2641 VAT Return - Monthly (October 2026)
- Payroll withholding
- Day 15 of the following month · each month
the employer pays the APIT withheld from remuneration by the 15th day of the month following the month of deduction; the employer's annual APIT statement is due 30 April.
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15 26110 APIT Payment - November 2026
Running the company
Running a company here
Not in our records The authorities’ pages on running a company have not been read for Sri Lanka yet.
Economy and trade
What it exports
Goods Sri Lanka exported, by product, as a share of its goods exports each year. Exports include goods passing through for re-export. A share describes Sri Lanka’s own trade; it does not compare places.
| Product (HS heading) | 2022 | 2023 | 2024 | Value, 2024 |
|---|---|---|---|---|
| Tea, whether or not flavoured HS 0902 | 5.5% | 8.5% | 10.0% | US$1.4 bn |
| Brassières, girdles, corsets, braces, suspenders, garters and similar articles and parts thereof, whether or not knitted or crocheted HS 6212 | 5.2% | 4.7% | 4.7% | US$641 m |
| Women's or girls' slips, petticoats, briefs, panties, nightdresses, pyjamas, négligés, bathrobes, dressing gowns and similar articles, knitted or crocheted HS 6108 | 5.1% | 4.1% | 4.1% | US$565 m |
| Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear) HS 6204 | 4.1% | 3.4% | 3.7% | US$504 m |
| T-shirts, singlets and other vests, knitted or crocheted HS 6109 | 3.5% | 3.5% | 3.3% | US$456 m |
| Retreaded or used pneumatic tyres of rubber; solid or cushion tyres, tyre treads and tyre flaps, of rubber HS 4012 | 3.4% | 3.2% | 3.3% | US$451 m |
| Men's or boys' suits, ensembles, jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear) HS 6203 | 3.4% | 2.9% | 3.0% | US$411 m |
| Gloves, mittens and mitts, knitted or crocheted HS 6116 | 3.0% | 2.7% | 3.0% | US$409 m |
| Precious stones (other than diamonds) and semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded precious stones (other than diamonds) and semi-precious stones, temporarily strung for convenience of transport HS 7103 | 4.0% | 2.5% | 2.8% | US$379 m |
| Men's or boys' underpants, briefs, nightshirts, pyjamas, bathrobes, dressing gowns and similar articles, knitted or crocheted HS 6107 | 2.8% | 2.1% | 2.7% | US$366 m |
Total goods exports, 2024: US$13.8 bn. The ten largest headings are shown.