📈 Clarity Urged for Digital Services VAT Implementation

Sri Lanka is set to implement VAT on digital services provided by non-resident suppliers effective April 1, 2026, yet stakeholders warn of a significant "regulatory gap" regarding administrative guidance. • Implementation Status: While the policy was deferred from October 2025 to April 2026, the Inland Revenue Department (IRD) has yet to issue updated technical instructions, leaving global platforms reliant on a superseded July 2025 Gazette. • Key Concerns: • Lack of clear registration procedures for non-resident digital service providers. • Undefined responsibilities for intermediaries (e-marketplaces) and payment facilitators. • Absence of specific documentation and invoicing requirements for ICT/BPM and global tech sectors. • Economic Risks: Delay in proactive guidance risks non-compliance, tax disputes, and under-collection of revenue. Over 120 countries already have established frameworks that Sri Lanka is expected to follow to ensure revenue outcomes and system credibility. • Required Actions: Stakeholders are calling for an urgent implementation circular from the IRD to clarify filing processes and transitional rules before the 24-hour countdown to the new fiscal deadline. _Note: Based on current industry analysis and IRD public notices._