Sri Lanka’s Inland Revenue Department has reminded taxpayers of their VAT and VAT on Financial Services obligations for May 2026, emphasising the importance of timely payments, accurate return filing, and compliance with input tax credit rules to avoid penalties and the loss of eligible tax claims.
The Inland Revenue Department (IRD) of Sri Lanka has issued reminders to taxpayers regarding Value Added Tax (VAT) and VAT on Financial Services (VAT on FS) for the month of May 2026. Both payments and returns must be completed within the stipulated dates to avoid penalties.
VAT on goods and services
Taxpayers are reminded that VAT for the month of May 2026 must be paid on or before 20 June 2026.
The Inland Revenue Department has specified Tax Type Code 70, Period Code 26220, and Payment Category S for this payment. Any cheque, bank draft, or pay order realised after the due date will be treated as a late payment, and penalties will apply for non‑payment or late payment.
The VAT Return for May 2026 must be filed online by 30 June 2026 under Return Code 2622.
Penalties will be imposed for failure to submit or for incorrect filing. In addition, input tax credits are subject to strict time limits. VAT paid on local purchases must be claimed within 12 months of the invoice date, while VAT paid on imports must be claimed within 24 months of the customs declaration date. Claims are valid only if the VAT return is filed within these periods.
VAT on financial services
For VAT on Financial Services, taxpayers must make the payment for May 2026 on or before 20 June 2026.
The applicable codes are Tax Type Code 75, Payment Period Code 26050, and Payment Category S.
The Inland Revenue Department encourages taxpayers to use the Online Tax Payment Platform (OTPP), though payments can also be made at any branch of the Bank of Ceylon.
Penalties for non‑payment or late payment will not be waived or reduced, and cheques, drafts, or pay orders realised after the deadline will be considered late.
Earlier, Sri Lanka’s government released the Value Added Tax (Amendment) Bill, introducing significant changes to the VAT Act No. 14 of 2002.
