VAT Calculator Sri Lanka (18%)

Zero-rated supplies (section 7 of the VAT Act) include exported goods and services connected with property outside Sri Lanka, provided payment is received in foreign currency through a licensed bank in Sri Lanka within six months of the end of the taxable period. Software developed for use wholly outside Sri Lanka also qualifies, with documentary evidence. From 1 October 2025, services of a registered garment buying office to overseas buyers are zero-rated on the same foreign-currency condition.

Exempt supplies for taxable periods from 1 January 2024 (First Schedule to the VAT Act) include wheat and wheat flour, infant milk powder, prescribed medicines, electricity, educational services, healthcare services other than hospital room charges, public passenger transport other than air, water, tourist and taxi services, locally manufactured rice, rice flour and bread, unprocessed agricultural and fishing products produced in Sri Lanka, burial and cremation services, geriatric and child care, and listed financial services such as account operation, currency exchange, loans and life insurance.

From 1 July 2026 the exemptions also cover supplies to Businesses of Strategic Importance approved under the Colombo Port City Economic Commission Act, and online education and healthcare services supplied by non-residents through an electronic platform. When the customer is not VAT-registered, the invoice must show the total price including tax.