Sri Lanka Delays VAT on Global Digital Services to April 2026

COLOMBO (News 1st); The Cabinet of Ministers has approved a proposal to postpone the implementation of Value Added Tax (VAT) on digital services provided by non-resident individuals, shifting the effective date from October 1, 2025 to April 1, 2026.

The decision was made following requests from international service providers who cited practical challenges in adapting to the new tax requirements within the original timeframe. 

Under the Value Added Tax (Amended) Act No. 4 of 2025, digital services supplied by non-residents were to be taxed starting October. 

However, the government has now agreed to extend the grace period, allowing service providers more time to adjust systems, ensure compliance, and align with Sri Lanka’s tax framework.

The revised provisions will be incorporated into the updated VAT Act.