Sri Lanka – VAT Registration: Non-Resident Providers of Digital Services 

The Sri Lankan Inland Revenue Department(IRD) issued a Notice on April 2, 2026, that further postpones the introduction of the new VAT regime for non-resident providers of digital services. The previous Notice stipulated that by April 1, 2026, non-resident providers of digital services should account for VAT when the conditions are met. 

The representatives of the IRD stated that the latest postponement was a necessary measure due to the “lack of time” to transpose these tax provisions into the tax regulations. The starting date of the new regime is further postponed for three months. 

Timeline 

Non-resident providers of digital services should account for VAT under the new regime from July 1, 2026. 

Scope of VAT regime 

Taxable services(non exhaustive list): 

• Digital Services 
• Streaming services 
• Cloud services 
• SaaS 
• E-marketplace services 
• Subscription-based services 
• Software-based services

Most probably, this would be the last postponement of the new regime, and from July 1, 2026, non-resident providers of digital services to local customers would become accountable for VAT.