Guide for Sri Lankans in Australia: Tax liability & e-filing Y/A 2025/26 on taxcalculator.lk – understand residency rules, worldwide income taxation, and how to file through the IRD portal from overseas.

Sri Lankans living in Australia—whether permanent residents, temporary visa holders, or dual citizens—must carefully assess their Sri Lankan income tax obligations for the Year of Assessment (Y/A) 2025/2026.

Many assume that living abroad automatically removes Sri Lankan tax liability. However, under Sri Lanka’s income tax law, your physical presence in Sri Lanka determines your tax residency status—not your citizenship alone.

This comprehensive guide explains:

Sri Lanka tax residency rules (183-day rule)
Resident vs. non-resident taxation
Filing obligations and income thresholds
How to file your return from Australia
Worldwide income implications
Key updates for Y/A 2025/2026
Practical compliance tips for Sri Lankan expats

If you need quick tax estimates, you can also use our calculators at taxcalculator.lk to assess your liability before filing.

Understanding the Sri Lankan Tax Year (Y/A 2025/2026)

The Sri Lankan tax year runs from:

1 April 2025 – 31 March 2026

This is different from Australia’s tax year (1 July – 30 June), so Sri Lankan expats must be careful when reconciling income between the two systems.

Tax returns for this period must be filed with the Inland Revenue Department (IRD) through its official online portal.

1. Tax Residency Rules for Sri Lankans in Australia

The 183-Day Rule (Most Important Test)

Your Sri Lankan tax residency depends primarily on physical presence.

You are considered a Sri Lankan tax resident if:

You are physically present in Sri Lanka for 183 days or more during any 12-month period within the Year of Assessment.

If you meet this threshold during Y/A 2025/2026:

✔ You are taxed on worldwide income
✔ You must declare foreign employment income (including Australian salary)
✔ You must declare global assets and liabilities as of 31 March 2026

If you are present less than 183 days, you are generally treated as a non-resident.

Important Clarifications

1️⃣ Citizenship Does NOT Determine Tax Residency

A Sri Lankan citizen living in Australia is typically a non-resident unless meeting the 183-day rule.
Loss of Sri Lankan citizenship does not remove tax liability if Sri Lankan-sourced income exists.
Non-citizens who previously lived in Sri Lanka follow the same residency rules.

2️⃣ Government Employees Abroad

Sri Lankan government employees posted overseas may still be treated as residents depending on circumstances.

2. Resident vs. Non-Resident: What Gets Taxed?

Your residency status determines the scope of taxation.

Status	Tax Scope	Filing Trigger
Resident (183+ days in SL)	Worldwide income	Annual income exceeding LKR 1,800,000
Non-Resident	Sri Lankan-source income only	Any taxable Sri Lankan income

If You Are a Resident

You must declare:

Australian employment income
Australian business income
Rental income (Australia or elsewhere)
Dividends and foreign investment income
Capital gains (if applicable)

From April 2025, certain foreign service income may be taxed at 15%, subject to law and treaty interpretation.

Residents must also declare:

Assets and liabilities as of 31 March 2026
Bank accounts (local and foreign)
Properties
Investments
Loans

If You Are a Non-Resident

You are taxed only on Sri Lankan-sourced income, such as:

Rental income from property in Sri Lanka
Bank interest from Sri Lankan banks
Dividends from Sri Lankan companies
Business income generated in Sri Lanka
Capital gains on Sri Lankan property

If you have zero Sri Lankan income, you typically do not need to file.

However, filing is recommended if:

Income exceeds thresholds
You expect future audits
You are involved in property transactions
You require tax clearance certificates

3. Filing Thresholds for Y/A 2025/2026

From April 2025:

Monthly threshold: LKR 150,000
Annual threshold: LKR 1,800,000
Personal relief: LKR 1,200,000

If your income exceeds LKR 1.8 million annually and you are a resident, filing is mandatory.

Non-residents must file if they have taxable Sri Lankan-source income, regardless of threshold.

4. How to File Sri Lankan Tax Return from Australia

Filing must be done online via the **Inland Revenue Department e-Services portal.

Official website:
https://www.ird.gov.lk

Step 1: Obtain a TIN (Taxpayer Identification Number)

If you don’t already have one:

Visit IRD website
Navigate to e-Services > Taxpayer Registration
Register using:
- NIC (Sri Lankan citizens)
- Passport (Non-residents / foreigners)

You will receive:

TIN
PIN for login access

You can register from Australia—physical presence in Sri Lanka is not required.

Step 2: Log into the IRD Portal

Using your:

TIN
PIN

Select:

Individual Income Tax (IIT)

Choose:

Year of Assessment 2025/2026

Step 3: Choose the Return Type

Simplified Return

Applicable if you have:

Employment income
Interest income
Solar income

Standard Return

Required if you have:

Business income
Rental income
Foreign income
Capital gains
Multiple income sources

Most Sri Lankan expats in Australia should use the Standard Return.

Step 4: Declare Income

Depending on residency:

Residents declare:

Australian salary
Sri Lankan income
Investment income

Non-residents declare:

Sri Lankan rent
Interest
Dividends
Local business income

Step 5: Declare Reliefs and WHT

You can claim:

Personal relief (LKR 1.2M)
Qualifying payments
Withholding tax credits (if applicable)

Step 6: Declare Assets and Liabilities (Residents Only)

Residents must disclose:

Bank balances
Property
Loans
Investments
Foreign assets

As at 31 March 2026.

Step 7: Submit & Pay Tax

Review declaration
Submit electronically
Pay via approved payment methods

If you are an instalment payer, ensure quarterly self-assessment payments are made on time.

5. Double Taxation Considerations (Sri Lanka & Australia)

Sri Lanka and Australia have a Double Tax Agreement (DTA). If you are taxed in Australia on income also taxable in Sri Lanka, you may claim:

Foreign tax credit (subject to conditions)
Treaty benefits

Careful planning is required to avoid double taxation.

Professional advice is recommended for:

Dual residency situations
Foreign income structuring
Complex asset disclosures

6. Common Mistakes Sri Lankan Expats Make

❌ Assuming no filing is required because living abroad
❌ Ignoring Sri Lankan rental income
❌ Not declaring foreign income when resident
❌ Forgetting asset disclosure requirement
❌ Missing filing deadlines
❌ Not maintaining documentation

7. Filing Deadlines

The IRD may announce deadlines and extensions. In previous years, extensions were granted (e.g., up to November 30 for prior years).

Always check announcements from the Inland Revenue Department.

Late filing may result in:

Penalties
Interest
Compliance risk

8. Do You Need to File If You Are a Pure Non-Resident?

If:

You stayed outside Sri Lanka the entire year
You have zero Sri Lankan income
No property, rent, business or bank interest

Then filing is generally not required.

However, if you:

Plan to sell property
Have inherited assets
May be subject to audit

Voluntary compliance is advisable.

9. Practical Example

Example 1: Non-Resident Sri Lankan in Melbourne

Stayed in Sri Lanka: 20 days
Has rental income in Colombo: LKR 2,400,000 annually

➡ Must file in Sri Lanka
➡ Taxed only on rental income
➡ No need to declare Australian salary

Example 2: Resident Sri Lankan Working in Sydney

Stayed in Sri Lanka: 190 days
Earned AUD salary equivalent LKR 10M
No Sri Lankan income

➡ Considered Sri Lankan tax resident
➡ Must declare worldwide income
➡ Australian income taxable in Sri Lanka (with possible foreign tax credit)
➡ Must declare assets/liabilities

10. Why Proper Compliance Matters

Sri Lanka has strengthened:

Digital tax compliance
Cross-border data tracking
Asset monitoring systems

Failure to comply can affect:

Property transactions
Bank operations
Future immigration matters
Tax clearance certificates

11. SEO & Compliance Strategy for Expats

If you are a Sri Lankan in Australia searching for:

“Sri Lanka tax return from Australia 2025/2026”
“Sri Lankan expat income tax filing”
“IRD e-file overseas non-resident”

This guide is designed specifically for you.

For accurate tax computation before filing, use the calculators at taxcalculator.lk to estimate:

Employment tax liability
Rental income tax
Resident vs non-resident impact
Personal relief optimization

Frequently Asked Questions (FAQ)

Q1: Do I need Sri Lankan citizenship to be taxed?

No. Tax liability depends on residency and source of income.

Q2: Can I file from Australia?

Yes. Filing is fully online via the IRD portal.

Q3: What if I forgot to file last year?

You should regularize immediately to avoid penalties.

Q4: Do I need to declare Australian bank accounts?

Only if you are a Sri Lankan tax resident.

Final Thoughts

Sri Lankan expats in Australia must carefully evaluate:

Days spent in Sri Lanka
Income thresholds
Residency classification
Filing obligations

The key factor is the 183-day rule—not citizenship.

If you are unsure about your status or liability, consult a qualified tax professional or use digital tools available at taxcalculator.lk to estimate your position before filing.

Staying compliant ensures smooth financial planning, protects your assets, and avoids unnecessary penalties.

Need Help Calculating Your Sri Lankan Tax for Y/A 2025/2026?
Visit taxcalculator.lk and use our smart tax tools to estimate your liability today.

Income Tax Filing Guide for Sri Lankans in Australia (Y/A 2025/2026)