Sri Lanka, Sept. 4 -- The implementation of the decision to introduce an 18% Value Added Tax (VAT) on digital services provided by non-resident companies to local consumers, effective October 2025 has been deferred to next year.

Under the Value Added Tax (Amendment) Act No. 4 of 2025, effective from October 1, 2025, digital services provided by non-residents are subject to VAT.

However, citing several practical reasons, non-resident digital service providers have requested additional time to comply with VAT requirements on such services, said the Cabinet Spokesman Dr. Nalinda Jayatissa.

Accordingly, it has been proposed to postpone the effective date for imposing VAT on digital services by non-residents from October 1, 2025, to April 1...