The standard corporate tax rate in Sri Lanka is 30% (increased from 24% effective 1 October 2022), while a 40% rate applies to companies with income from betting, gaming, liquor or tobacco.

Effective 1 October 2022, the reduced rates of 14% and 18% are repealed.

Effective 1 April 2023, exemptions are removed for the following:

• The provision of information technology and enabled services;
• Business involving the export of gold, gems, or jewellery or from the business of cutting and polishing of gems that are brought to Sri Lanka and exported after such cutting and polishing; and
• The following new undertakings:
• an undertaking involved in the sale of recycled construction materials commenced on or after 1 April 2021;
• an undertaking commenced by a resident person for the purpose of manufacturing boats or ships, commenced on or after 1 April 2021;
• a renewable energy project established with a capacity to produce not less than 100 Mega Watts of solar or wind power, commenced on or after 1 April 2021;
• an undertaking by any resident person that constructs and installs communication towers and related appliances or provides required technical services commenced on or after 1 January 2021; and
• an undertaking for letting bonded warehouses or warehouses related to the offshore business in the Colombo and Hambantota ports commenced on or after 1 April 2021.

Gains from the realization of investment assets, including shares, are subject to tax at the rate of 30% (increased from 10% effective 1 October 2022).

Until 1 October 2022, an exemption applied on:

• Gains from the realization of land or buildings sold, exchanged, or transferred to a real estate investment trust (REIT) listed in the Colombo Stock Exchange; and
• Gains on the realization of units or amounts derived as gains from the realization of capital assets of a business or investment by a unit holder, from REITs.