Employees Provident Fund (EPF)
Employers and employees are required to contribute specified percentages (employer 12%, employee 8%) of each employee's monthly emoluments/salary to the EPF established by the government. Alternatively, employers and employees can contribute to certain private provident funds approved by the labour authority.
Employees Trust Fund
Employers are also required to contribute a specified percentage (currently 3%) of each employee's monthly emoluments/salary to the Employees Trust Fund established by the government.
Employers are required to pay a half-month's salary for each year of completion if the employee's service period exceeds five years at the time of retirement, resignation, or retrenchment.
Value-added tax (VAT)
VAT is payable on the prescribed valuations of imports and domestic supplies at a standard rate of 15%.
See the Other taxes section in the Corporate summary for more information.
Net wealth/worth taxes
There are no net wealth/worth taxes in Sri Lanka.
Inheritance, estate, and gift taxes
There are no inheritance, estate, or gift taxes in Sri Lanka.
Economic Service Charge (ESC)
ESC is payable quarterly by every person and every partnership in respect of the aggregate turnover of their trade, business, profession, or vocation at the rate 0.5% if the total turnover exceeds LKR 12.5 million for that quarter. ESC so paid is deductible from the income tax payable for that year of assessment. ESC is not refundable but can be carried forward for the two immediately succeeding tax years to be set off against the income tax payable for those two years.
Tourism development levy
Tourism development levy is payable by every person (such as tourist hotels) licensed under the Tourist Development Act on the turnover of such institution at the rate of 1%.
Excise duties and special excise levies are charged on tobacco, cigarettes, liquor, motor vehicles, selected petroleum products, paints, air conditioners, dishwashers, household washing machines, and other products at various rates and at unit rates.
Taxes (more usually called ‘rates’) are currently assessed and collected annually from the owners of land and premises by the local authorities of the areas in which the properties are located. These authorities also impose and collect annual licence fees from certain businesses as well as taxes based on the annual gross takings of certain businesses, such as hotels.