Tax Compliance Flow - foreign independent service provider

Benefits of Paying Tax

Taxes fund infrastructure projects, education, healthcare, and public services that benefit society.

Legal Side of Tax (Act)

From April 1, 2025, freelancers and independent service providers in Sri Lanka are subject to updated income tax rules, particularly concerning foreign currency income. Whether you offer digital services, work remotely, or run a side business, understanding how the Inland Revenue Department (IRD) classifies your income is crucial for staying compliant..

Income Tax Rates for YA 2025–26

Tax-free allowance: LKR 1,800,000
Next LKR 1,000,000: 6%
Balance income: 15%

Are you older than 18 years?

You are under 18 and not required to pay tax at this time.

Are you an Independent Service Provider (freelancer) or an Employee?

Note for Independent Service Providers:
You are required to submit quarterly tax returns on time via RAMIS.
Keep track of your income and expenses for accurate tax computation.
If you don't have a TIN or PIN, we will guide you through the process next.

Common Questions for Independent Service Providers

What kind of expenses can I add?

You can add all legitimate business-related expenses except those reimbursed by your company.

Can I add expenses reimbursed by the company?

No — costs reimbursed by your company are not treated as your expenses since you have already been compensated.

Can I add reimbursed amounts as earnings?

No — reimbursements are returns of money spent and are not taxable income or business revenue.

Do I need to provide the exchange rate?

Yes, provide the exchange rate if possible. Use the Central Bank of Sri Lanka (CBSL) buying rate for the transaction date, or note the reliable source used.

Can I add assets over 5 years old?

No — only assets less than 5 years old qualify under the guideline.

What should I do with invoices?

Keep all original invoices and receipts. Provide expense amounts and summaries when submitting, but retain originals for verification.

Note for Employees:
Your employer deducts tax at source via PAYE.
You should ensure your TIN and tax details are up to date.
If you don't have a TIN or PIN, we will guide you through the process next.

Common Deductions & Allowances

Personal Relief: Every individual taxpayer is eligible for a personal relief amounting to LKR 1,800,000 per year. This reduces your taxable income.
Allowable Deductions: Business expenses, provident fund contributions, housing loan interest (subject to limits), and donations to approved charities.
Non-allowable Expenses: Reimbursed expenses by your employer or company and personal non-business expenses.

Let's start with your TIN details.

1. Do you have a TIN?

1.1 Do you have a PIN?

1.1.1 Is your TIN connected with your Email?

Do you know how to connect your TIN with Email?

→ Just visit IRD and it will be done same day.

→ You can request online via IRD portal.

→ Just need to sign a letter and send to IRD.

Do you log in to the RAMIS system?

→ Please contact IRD to activate your RAMIS login.

Is your tax type registered?

→ Register your tax type via IRD online portal.

Are you an independent taxpayer?

→ You must submit your quarterly return via RAMIS.

→ Your process is complete.

→ Please obtain your PIN from IRD:

→ Visit the nearest IRD office with your ID. They will provide your PIN immediately.

How would you like to connect your email with IRD?

→ Send a signed letter and your ID copy to IRD’s official email. Processing may take more than a week.

→ Visit the nearest IRD office to connect your email with them and reset your password.

1.2 Do you want to register for a TIN?

How would you like to proceed with TIN registration?

→ You can register your TIN online through the IRD portal.

If IRD says you have already registered, how do you get your TIN?

→ Call IRD helpline and request your TIN information. Call to 1944 dial 1132

→ Visit the nearest IRD office with your ID and request your TIN.

→ OK, thanks.