VAT Registration & Returns
Register for VAT, file your returns, and stay compliant with Sri Lanka’s 18% VAT regime — without the administrative burden landing on you every month.
A business must register for VAT if its taxable supplies exceed Rs 60 million in any 12-month period, or Rs 15 million in any single taxable quarter. (A proposed reduction of this threshold to Rs 36 million was formally abandoned by the IRD in July 2026 — the Rs 60M/15M thresholds remain current.) Some businesses, such as certain importers and exporters, must register regardless of turnover.
The standard VAT rate is 18%. Once registered, VAT-registered persons must file returns and pay any liability by set monthly or quarterly deadlines, maintain compliant records, and — from 2026 — use IRD-specified secured point-of-sale arrangements and revised invoice formats where applicable.
We handle the full VAT lifecycle: assessing whether you need to register, completing the registration, and preparing and filing your returns every period so nothing is missed.
How we handle it
A clear, structured process from first contact to completed clearance.
Registration assessment
We check your turnover and activity against current thresholds to confirm if and when you must register.
VAT registration
We complete and submit your registration with the IRD.
Monthly/quarterly schedules
Your sales and purchase schedules are prepared each period, ready for the return.
Return preparation & filing
Your VAT return is calculated, reviewed with you, and filed on time.
Ongoing compliance
We keep you current as thresholds, rates, and invoicing rules change.
Scope of service
Included
- VAT registration threshold assessment
- VAT registration with the IRD
- Monthly or quarterly return preparation
- Input/output tax reconciliation
- Compliant invoice format guidance
Not Included
- VAT payment itself (paid by you to the IRD)
- Point-of-sale system setup/hardware
- Full bookkeeping (available separately)
- VAT on financial services (taxed separately at 20.5%)
Common questions
Do I need to register for VAT?
You must register if your taxable supplies exceed Rs 60 million over any 12 months, or Rs 15 million in a single quarter. Some activities (like certain imports/exports) require registration regardless of turnover. We can assess your specific situation.
Is the VAT registration threshold really still Rs 60 million?
Yes. A bill proposed cutting it to Rs 36 million, but the IRD confirmed in its July 2026 notice (SEC/PN/VAT/2026-03) that this reduction was abandoned and the existing Rs 60M/15M thresholds remain in force.
What VAT rate do I charge?
The standard rate is 18% for most goods and services. Some supplies are zero-rated or exempt, and financial services are taxed at 20.5% — we’ll confirm which applies to your business.
How often do I need to file VAT returns?
Most registered persons file monthly, with payment due by the 20th and the return due by the last day of the following month. Some businesses may file quarterly — we’ll confirm your filing frequency.
You may also need
Ready to get started?
Book a free consultation and we'll tell you exactly what's needed for your case.