Sri Lanka Tax Rates 2026
Current Sri Lanka tax rates for individuals, companies and investors, including personal income tax, personal relief, corporate income tax, capital gains tax, VAT, withholding tax and filing obligations.
Updated: 3 September 2026. Sri Lanka's year of assessment generally runs from 1 April to 31 March.
Sri Lanka individual income tax rates
For years of assessment commencing on or after 1 April 2025, the standard progressive income-tax rates for resident and non-resident individuals are as follows:
| Taxable income band (LKR) | Rate |
|---|---|
| First Rs. 1,000,000 | 6% |
| Next Rs. 500,000 | 18% |
| Next Rs. 500,000 | 24% |
| Next Rs. 500,000 | 30% |
| Balance | 36% |
Personal relief
A personal relief of Rs. 1,800,000 is available for a resident individual and for a non-resident individual who is a citizen of Sri Lanka for each year of assessment commencing on or after 1 April 2025. This relief is not deductible against gains from the realization of investment assets.
Resident individuals may also be entitled to specific statutory reliefs, including a 25% rent relief on qualifying rental income and relief connected with qualifying solar-panel expenditure, subject to the conditions in the Inland Revenue Act.
Special rates for individuals
Some categories of income are subject to special rates. Under the current tax chart, gains from the realization of investment assets are taxed at 10% for individuals. Gains and profits from certain specified businesses, including betting and gaming and manufacture or sale/import and sale of liquor or tobacco products, are subject to a 45% rate.
Certain qualifying service-export income received in foreign currency and remitted through the Sri Lankan banking system is subject to a maximum income-tax rate of 15%, subject to the statutory conditions.
Sri Lanka corporate income tax rates
The general corporate income-tax rate is 30%. Special rates continue to apply to specified activities.
| Company income / activity | Rate |
|---|---|
| General taxable income of a company | 30% |
| Gains and profits from betting and gaming | 40% |
| Manufacture and sale or import and sale of liquor or tobacco products | 40% |
| Gains from realization of investment assets | 30% |
Capital gains tax in Sri Lanka
Capital gains tax is no longer abolished. Under the current Inland Revenue framework, gains from the realization of investment assets are taxable. For individuals, the current rate shown by the Inland Revenue Department is 10%. For companies, gains from the realization of investment assets are generally taxed at 30%.
VAT in Sri Lanka
The standard Sri Lankan VAT rate is 18%. VAT applies to taxable supplies made by registered persons and to taxable imports, subject to exemptions and zero-rating rules under the Value Added Tax Act.
From 1 October 2025, specified services supplied by non-resident persons through electronic platforms to persons in Sri Lanka are also brought within the VAT framework, with the applicable rate currently being 18%.
Withholding tax and Advance Income Tax
Withholding and Advance Income Tax (AIT) apply to specified payments. Interest paid by banks and financial institutions is generally subject to 10% AIT/WHT under the current rules. A qualifying resident individual whose assessable income, including interest, does not exceed the Rs. 1,800,000 personal-relief amount may use the Inland Revenue Department's self-declaration procedure to seek relief from deduction, subject to the prescribed conditions.
Other payments, including dividends, rent, service fees and payments to non-residents, may carry different withholding rates or final-tax treatment. The applicable Inland Revenue Department tables and any relevant treaty should be checked for the specific payment.
Year of assessment, filing and payment
Sri Lanka's normal year of assessment runs from 1 April to 31 March. Income-tax, APIT, AIT/WHT, corporate-tax and VAT filing dates differ according to the type of taxpayer and return. Taxpayers should use the current Inland Revenue Department tax calendar and electronic filing guidance rather than relying on historical filing dates.
Official Sri Lanka tax resources
Disclaimer: This page provides a general overview of Sri Lankan tax rates. Actual liability depends on the taxpayer's residence, income source, exemptions, reliefs, deductions, industry, entity status, treaty position and subsequent legislative changes.