Sri Lanka - Other taxes and levies

Sri Lanka - Other taxes and levies

Taxation of international executives

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Social security tax

Gift, wealth, estate, and/or inheritance tax

Real estate tax

Sales/VAT tax

Unemployment tax

Other taxes

 

Source: Employees Provident Fund Act, No. 15 of 1958 as amended; Employees Trust Fund Act, No. 46 of 1980. Social Responsibility Levy which is administered by the Finance (Amendment) Act, No. 5 of 2005, Land (Restrictions and Alienation) Act No 38 of 2014.

Social security tax

Are there social security/social insurance taxes in Sri Lanka? If so, what are the rates for employers and employees?

Employer and employee

Type of insurance Paid by employer Paid by employee Total
Employees' provident fund 12% 8% 20%
Employees' trust fund 3% 0% 3%
Total 15% 8% 23%

Employers are required to contribute 12 percent of the relevant employee’s earnings and remit to the Employees’ Provident Fund (EPF). Earnings for this purpose means basic wage or salary plus all cost-of¬living and similar allowances and payments in respect of holidays, but not overtime payments. Contributions by the employees are made at 8 percent to the EPF.The above is the minimum contribution requirement.

All employers are required to contribute to the Employees’ Trust Fund (ETF). The statutory minimum contribution is 3 percent.

Gift, wealth, estate, and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes in Sri Lanka?

No.

Real estate tax

Are there real estate taxes in Sri Lanka?

Land lease Tax:

Purchase of land by a foreigner is prohibited by law. However, lease of land by a foreigner is permitted subject to an upfront lease tax oat 15% on the total lease value.

It has been proposed to remove the land lease tax effective 1 January 2016.Same is however pending legal enactment.

For this purpose, a “foreigner” is defined to include a person who is not a citizen of Sri Lanka and “land” is defined to include, “interest in land. Land cover with water and any house of building situated therein”.

Sales/VAT tax

Are there sales and/or value-added taxes in Sri Lanka?

Yes.

Unemployment tax

Are there unemployment taxes in Sri Lanka?

No.

Other taxes

Are there additional taxes in Sri Lanka that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.

Social responsibility levy (SRL)

Social responsibility levy of 1 percent was rescinded with effect from 1 April 2008.

Stamp duty

Stamp duty is levied on transfer of land and building on certain specified instruments prescribed in the law.

© 2016 KPMG Ford, Rhodes, Thornton & Co., a Sri Lanka partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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