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11.1. VAT on the Supply of Goods by Non-Residents

The supply of goods by a non-resident is subject to VAT in Sri Lanka if certain registration thresholds are met. The registration thresholds are taxable supplies of LKR 75 million or more per quarter (previously LKR 3 million till 31 December 2019) or LKR 300 million or more per annum (previously LKR 12 million till 31 December 2019), or if supplies are likely to exceed those amounts in the respective periods.

In the case of wholesale and retail activity, the registration threshold is supplies of LKR 12.5 million per quarter, including exempt and non-taxable supplies.

When a non-resident has an establishment in Sri Lanka, the establishment is typically responsible for the VAT. If a non-resident has no establishment in Sri Lanka, they must also register for VAT and appoint a resident tax representative that is responsible for all VAT obligations of the non-resident.