The government has pushed back the imposition of Value Added Tax (VAT) on digital services provided by non-resident individuals, moving the start date from October 1, 2025 to April 1, 2026.
Cabinet approval for the delay came after international service providers flagged difficulties in meeting the original deadline, citing the need for more time to reconfigure systems and comply with local tax rules.
The levy, introduced under the Value Added Tax (Amendment) Act No. 4 of 2025, was initially scheduled to take effect this October. With the six-month reprieve, authorities said the revised provisions would be incorporated into the updated VAT Act.
Officials said the move would give affected firms breathing space to ensure smoother implementation while strengthening Sri Lanka’s tax regime in line with global practice.