--- title: "Sri Lanka tax for new residents 2026: rates and regimes" url: https://settleanywhere.com/countries/sri-lanka/tax/ lang: en updated: 2026-10-11 --- # Sri Lanka tax Tax residence: At least 183 days in any 12-month period commencing or ending during the year of assessment. Special regime for new residents: Investor Category Residence Visa holders: not a Sri Lankan resident. Checked against official sources on 11 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## Tax residence - At least 183 days in any 12-month period commencing or ending during the year of assessment · Presence makes an individual resident - Year of assessment runs from 1 April. - Section 69(1) of the 2017 Act applies; the 2026 amendment changes section 69(1)(d) and adds 69(1A) only. ## Special regimes for new residents Special regime ### Investor Category Residence Visa holders: not a Sri Lankan resident for income tax (s.69(1A)) Tax relief **Details** - On: Residence status for income tax: Sri Lankan-source gains and profits remain chargeable An individual holding an Investor Category Residence Visa issued by the Controller of Immigration and Emigration is not a Sri Lankan resident for a year of assessment. Non-residents are charged income tax only on gains and profits arising or derived from Sri Lanka, so foreign-source income falls outside Sri Lankan income tax while the status applies. (sources 1, 2) #### Taxed on Residence status for income tax: Sri Lankan-source gains and profits remain chargeable; foreign-source income is not charged to a non-resident. #### Who it applies to - Hold an Investor Category Residence Visa issued by the Controller of Immigration and Emigration for the year of assessment. - Operative from 1 April 2025 (Inland Revenue (Amendment) Act No. 11 of 2026, section 9 inserting s.69(1A)). #### Exclusions - The Act does not say which of the investor options listed by the Immigration Department count as the Investor Category Residence Visa. - Sri Lankan-source income remains taxable under non-resident rules. #### Tax residence Section 69(1A) overrides the general residence tests of s.69(1) for visa holders. Residents are chargeable on Sri Lankan and foreign-source income; non-residents on Sri Lankan-source gains and profits only (IRD). #### Visas Applies only to the Investor Category Residence Visa; digital nomad, employment, student and spouse visas are not covered by the provision. #### Other taxes VAT, withholding, exchange-control and home-country taxes are separate. Checked against official sources on 10 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## Which visas the regimes apply to - **Investor Category Residence Visa holders: not a Sri Lankan resident**: [Investor visa · General](https://settleanywhere.com/countries/sri-lanka/investor-residence-visa/), Investor visa · Condo, Investor visa · Direct, Investor visa · Shares, Investor visa · Gov bonds. Applies only to the Investor Category Residence Visa; digital nomad, employment, student and spouse visas are not covered by the provision. ## Standard rules and foreign-source income Standard rules ### Income tax: residents on worldwide income, non-residents on Sri Lankan-source income **Details** - On: Gains and profits from employment, business, investment and other sources - Who: Residence is determined under the Inland Revenue Act, No. 24 of 2017, s.69 - Limit: LKR 1.8M/yr ≈ $5,440 A resident is chargeable on income from Sri Lanka and on foreign-source income (global income); a non-resident only on gains and profits arising or derived from Sri Lanka. From 1 April 2025 the rates on taxable income are 6% to LKR 1,000,000, (≈ $3,020) 18% to LKR 1,500,000, (≈ $4,530) 24% to LKR 2,000,000, (≈ $6,050) 30% to LKR 2,500,000 (≈ $7,560) and 36% above, after an aggregate personal relief of LKR 1,800,000 (≈ $5,440) for residents and citizens. (sources 2, 1, 3, 4) #### Taxed on Gains and profits from employment, business, investment and other sources, after the personal relief; gains from realising investment assets are taxed at 10%. #### Who it applies to - Residence is determined under the Inland Revenue Act, No. 24 of 2017, s.69. #### Exclusions - Employees leaving Sri Lanka for foreign employment under a contract of at least one year with a non-associated employer are not residents from the first day of that year of assessment until the contract expires (s.69(2A), effective 1 April 2025). - Gains from realising investment assets are taxed at 10%, outside the progressive scale. #### Limits - LKR 1,800,000 a year (≈ $5,440) · Aggregate personal relief for a resident individual, or a non-resident Sri Lankan citizen, for each year of assessment commencing on or after 1 April 2025. - LKR 1,000,000 a year (≈ $3,020) · 6% on taxable income up to LKR 1,000,000 (≈ $3,020) (years of assessment from 1 April 2025). - LKR 1,500,000 a year (≈ $4,530) · 18% on taxable income from LKR 1,000,001 (≈ $3,020) to LKR 1,500,000 (≈ $4,530). - LKR 2,000,000 a year (≈ $6,050) · 24% on taxable income from LKR 1,500,001 (≈ $4,530) to LKR 2,000,000 (≈ $6,050). - LKR 2,500,000 a year (≈ $7,560) · 30% on taxable income from LKR 2,000,001 (≈ $6,050) to LKR 2,500,000 (≈ $7,560); 36% above LKR 2,500,000 (≈ $7,560). #### Tax residence Year of assessment runs from 1 April. #### Visas Visa status does not determine residence, except the Investor Category Residence Visa rule in s.69(1A). #### Other taxes VAT and other levies apply separately. A digital nomad visa extension requires proof of registration with the Inland Revenue Department. Checked against official sources on 11 Oct 2026 [Change log](https://settleanywhere.com/changes/) Standard rules ### Sri Lanka: residents taxed on worldwide income Worldwide income **Details** - On: Worldwide income of residents (Inland Revenue Act section 4(a)) - Limit: LKR 1.8M/yr ≈ $5,440 A resident individual in Sri Lanka (resident there, or present 183 days or more in any 12-month period commencing or ending in the year of assessment) is taxed on income from wherever it arises; non-residents are taxed only on Sri Lankan-source income. (sources 5, 6, 7) #### Taxed on Worldwide income of residents (Inland Revenue Act section 4(a)); income arising in or derived from Sri Lanka for non-residents (section 4(b)). #### Who it applies to - Individual resident for the year of assessment: resides in Sri Lanka, or is present for 183 days or more in aggregate in any 12-month period commencing or ending during the year, or is a Government employee whose spouse is posted abroad, or works on a Sri Lankan ship. - Resident individuals, and citizens who are non-residents, receive an aggregate personal relief of LKR 1,800,000 (≈ $5,440) for years of assessment commencing on or after 1 April 2025. #### Exclusions - Holders of an Investor Category Residence Visa are not residents for a year of assessment (section 69(1A), effective 1 April 2025); see “Investor Category Residence Visa holders: not a Sri Lankan resident for income tax (s.69(1A))”. #### Limits - LKR 1,800,000 a year (≈ $5,440) · Personal relief for resident individuals and citizens, for years of assessment from 1 April 2025 #### Days in the country - At least 183 days in any 12-month period commencing or ending during the year of assessment · Presence makes an individual resident #### Tax residence Section 69(1) of the 2017 Act applies; the 2026 amendment changes section 69(1)(d) and adds 69(1A) only. #### Visas The Investor Category Residence Visa is the only visa carved out of resident status by statute. #### Other taxes Progressive rates are in “Income tax: residents on worldwide income, non-residents on Sri Lankan-source income”; VAT and other levies apply separately. Checked against official sources on 10 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## VAT, social security and other taxes - VAT, withholding, exchange-control and home-country taxes are separate. - VAT and other levies apply separately. A digital nomad visa extension requires proof of registration with the Inland Revenue Department. - Progressive rates are in “Income tax: residents on worldwide income, non-residents on Sri Lankan-source income”; VAT and other levies apply separately. ## Questions people ask ### When do you become a tax resident in Sri Lanka? At least 183 days in any 12-month period commencing or ending during the year of assessment (Presence makes an individual resident). Year of assessment runs from 1 April. ### Who qualifies for Investor Category Residence Visa holders: not a Sri Lankan resident? Hold an Investor Category Residence Visa issued by the Controller of Immigration and Emigration for the year of assessment. Applies only to the Investor Category Residence Visa; digital nomad, employment, student and spouse visas are not covered by the provision. ### How are Digital nomad visa holders taxed in Sri Lanka? No special regime in our records is tied to the Digital nomad visa. The standard rules apply: A resident is chargeable on income from Sri Lanka and on foreign-source income (global income); a non-resident only on gains and profits arising or derived from Sri Lanka. From 1 April 2025 the rates on taxable income are 6% to LKR 1,000,000, (≈ $3,020) 18% to LKR 1,500,000, (≈ $4,530) 24% to LKR 2,000,000, (≈ $6,050) 30% to LKR 2,500,000 (≈ $7,560) and 36% above, after an aggregate personal relief of LKR 1,800,000 (≈ $5,440) for residents and citizens. ### Is there a tax break for Investor visa · General holders in Sri Lanka? Investor Category Residence Visa holders: not a Sri Lankan resident for income tax (s.69(1A)): An individual holding an Investor Category Residence Visa issued by the Controller of Immigration and Emigration is not a Sri Lankan resident for a year of assessment. It's separate from the visa and has its own conditions. ≈ USD figures are approximate: daily reference rates from ExchangeRate-API, dated 12 Oct 2026, refreshed when the site is updated. **Sources (7)** ## Official sources 1. [Inland Revenue (Amendment) Act, No. 11 of 2026 (certified 3 June 2026; gazetted 5 June 2026)](https://www.ird.gov.lk/en/publications/Acts_Income%20Tax_2017/IR_Act_No_11-2026_E.pdf) · Parliament of Sri Lanka (published by Inland Revenue Department) · checked 2026-10-10 · published 2026-06-05 2. [Income Tax](https://www.ird.gov.lk/en/Type%20of%20Taxes/SitePages/Income%20Tax.aspx?menuid=1201) · Inland Revenue Department · checked 2026-10-10 3. [Digital Nomad Visa Category](https://www.immigration.gov.lk/content/files/visa/digital_nomad/Digital%20Nomad%20Visa%20Category.pdf) · Department of Immigration and Emigration of Sri Lanka · checked 2026-10-12 4. [Inland Revenue Act, No. 24 of 2017, consolidated text incorporating amendments up to 31 March 2025 (First Schedule, tax rates)](https://www.ird.gov.lk/en/publications/Acts_Income%20Tax_2017/IRA_Cons_Act_-_2025_Changes.pdf) · Inland Revenue Department, Sri Lanka · checked 2026-10-11 · published 2025-03-31 5. [Inland Revenue Act, No. 24 of 2017 (sections 4 and 69, original text)](https://www.ird.gov.lk/en/publications/Acts_Income%20Tax_2017/IR_Act_No_24_2017_E.pdf) · Inland Revenue Department of Sri Lanka · checked 2026-10-10 · published 2017-10-24 6. [Income Tax](https://www.ird.gov.lk/en/Type%20of%20Taxes/SitePages/Income%20Tax.aspx?menuid=1201) · Inland Revenue Department of Sri Lanka · checked 2026-10-10 7. [Inland Revenue (Amendment) Act, No. 11 of 2026](https://www.ird.gov.lk/en/publications/Acts_Income%20Tax_2017/IR_Act_No_11-2026_E.pdf) · Inland Revenue Department of Sri Lanka · checked 2026-10-10