Guide for Sri Lankans in USA: Tax liability & IRD e-filing Y/A 2025/26. Learn residency rules, worldwide vs Sri Lankan-source income, thresholds, and how to file online via taxcalculator.lk.

Sri Lankans living in the United States of America — whether Green Card holders, work visa holders, dual citizens, or permanent residents — must understand their Sri Lankan income tax obligations for the Year of Assessment (Y/A) 2025/2026 (April 1, 2025 – March 31, 2026).

Many expatriates assume that moving abroad automatically removes their Sri Lankan tax responsibilities. However, Sri Lanka’s tax system is primarily based on tax residency status, not citizenship alone.

This comprehensive guide explains:

✅ How Sri Lanka determines tax residency
✅ Who must file a tax return
✅ Resident vs Non-Resident tax scope
✅ Worldwide income vs Sri Lankan-source income
✅ IRD e-filing process from overseas
✅ Practical examples for Sri Lankan expats in USA
✅ Compliance tips to avoid penalties

If you are searching for:

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

This guide is for you.

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

The Sri Lankan tax year runs from:

📅 April 1, 2025 – March 31, 2026

All income earned during this period must be assessed under Y/A 2025/2026.

The tax authority responsible is the
👉 Inland Revenue Department of Sri Lanka (IRD)

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

Tax Residency Rules for Sri Lankans in USA

The 183-Day Rule (Most Important Rule)

You are considered a Sri Lankan tax resident if:

You are physically present in Sri Lanka for 183 days or more in any 12-month period within the tax year.

Example:

If you spent:

5 months in Sri Lanka between April 2025 – March 2026
And additional visits bringing total days above 183

👉 You are a Sri Lankan tax resident

What Happens If You Are a Resident?

If you qualify as a resident, you are taxed on:

🌍 Worldwide Income

This includes:

Salary earned in USA
Business income in USA
Dividends from US companies
Rental income from US property
Bank interest outside Sri Lanka
Sri Lankan income (if any)

⚠️ Important Update (from April 2025):
Foreign service income may be subject to a 15% tax (subject to current IRD regulations).

What If You Live in USA Full-Time?

If you:

Live in USA throughout the tax year
Do not visit Sri Lanka for 183 days
Are not a Sri Lankan government employee posted abroad

👉 You are generally treated as a Non-Resident for Sri Lankan tax purposes.

Resident vs Non-Resident – Tax Scope Comparison

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

What Is Sri Lankan-Source Income?

If you are a non-resident living in USA, you are taxed only on income derived from Sri Lanka.

Examples:

✔ Rental income from Sri Lankan property
✔ Interest from Sri Lankan bank accounts
✔ Dividends from Sri Lankan companies
✔ Business income in Sri Lanka
✔ Capital gains from Sri Lankan property

If you earn zero Sri Lankan income, generally:

👉 You are not required to file
But filing is recommended in certain cases (audit risk, future property transactions, compliance documentation).

Income Threshold for Filing (Y/A 2025/2026)

From April 2025:

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

If your assessable income exceeds these thresholds, filing is required.

Special Situations for Sri Lankans in USA

1️⃣ Dual Citizens

Citizenship does NOT automatically determine tax status.
Residency (183-day rule) determines tax scope.

2️⃣ Former Sri Lankan Citizens

If you have renounced Sri Lankan citizenship but:

Own property in Sri Lanka
Earn rental income
Earn interest in Sri Lanka

You are still taxed as a non-resident on Sri Lankan-source income.

3️⃣ Government Employees Abroad

Certain Sri Lankan government employees posted overseas may still be treated as residents under special rules.

Do You Need a TIN?

Yes.

To file or conduct taxable transactions in Sri Lanka, you must obtain a:

👉 Taxpayer Identification Number (TIN)

Even non-residents may require TIN if:

Selling property
Receiving rental income
Opening investment accounts
Filing tax returns

How to File Sri Lankan Income Tax from USA

Sri Lanka mandates electronic filing (e-filing) for eligible individuals.

You can file online via the
👉 Inland Revenue Department of Sri Lanka e-Services portal

Step-by-Step Filing Process

Step 1: Register for TIN

Visit: https://www.ird.gov.lk
Go to: e-Services > Taxpayer Registration

Documents Required:

NIC (Sri Lankans)
Passport (for non-residents / foreigners)
Address details
Contact email & mobile

Step 2: Obtain PIN

After registration, IRD issues:

TIN
Temporary PIN for login

Step 3: Log Into IRD Portal

Select:

👉 Individual Income Tax (IIT)
👉 Year of Assessment: 2025/2026

Step 4: Choose Return Type

Simplified Return (if applicable):

Employment income
Bank interest
Solar income

Standard Return:

Rental income
Business income
Capital gains
Complex income sources

Step 5: Declare Income

Residents must declare:

Worldwide income
Assets & liabilities as of March 31, 2026

Non-residents must declare:

Sri Lankan-source income only

Step 6: Declare Withholding Tax (WHT)

If tax has already been deducted at source:

Declare WHT
Adjust against final tax payable

Step 7: Submit Return

Review carefully
Submit electronically
Keep acknowledgment receipt

Quarterly Self-Assessment Payments

If you are an instalment payer:

Tax may need to be paid quarterly in advance.

Failure to pay on time may lead to:

Penalties
Interest charges
Compliance flags

Practical Examples

Example 1: Software Engineer in USA

Lives in USA entire year
Owns apartment in Colombo generating rent

👉 Non-resident
👉 Must declare rental income only

Example 2: Consultant Visiting Sri Lanka Frequently

Spends 200 days in Sri Lanka
Earns salary in USA

👉 Resident
👉 Must declare worldwide income

Example 3: Retired Person in USA with SL Bank Interest

No US salary
Earns LKR 2M interest in Sri Lanka

👉 Non-resident
👉 Must file if taxable after reliefs

Common Mistakes Sri Lankan Expats Make

❌ Assuming US tax filing replaces Sri Lankan filing
❌ Ignoring rental income in Sri Lanka
❌ Not obtaining TIN
❌ Missing deadlines
❌ Failing to declare assets when resident
❌ Believing citizenship determines tax

Filing Deadlines

Typically, returns must be filed within IRD prescribed deadlines.
Extensions may be announced (e.g., prior years extended until November 30).

Always check official notices from
👉 Inland Revenue Department of Sri Lanka

Penalties for Non-Compliance

Failure to file may result in:

Late filing penalties
Interest on unpaid tax
Estimated assessments
Legal action
Travel/financial restrictions

Should You File Even If Not Mandatory?

In many cases, yes.

Benefits of filing:

✔ Maintain tax compliance history
✔ Avoid audit risk
✔ Simplify future property transactions
✔ Avoid complications during visa/financial processes

How taxcalculator.lk Can Help

At taxcalculator.lk, we assist:

Sri Lankan expats in USA
Property owners abroad
Dual citizens
Non-residents with Sri Lankan income

Our services include:

✔ Tax residency assessment
✔ Income tax computation
✔ IRD e-filing assistance
✔ Instalment tax calculation
✔ Asset & liability declarations
✔ Advisory for expats

You can also use our online tax calculation tools to estimate:

Income tax payable
Personal relief impact
Rental tax exposure

Frequently Asked Questions (FAQ)

Q1: I live in USA full-time. Do I need to file in Sri Lanka?

Only if you earn Sri Lankan-source income or meet residency conditions.

Q2: Does US citizenship remove Sri Lankan tax liability?

No. Residency and income source determine liability.

Q3: I have only bank interest in Sri Lanka. Must I file?

If taxable after reliefs or IRD requires compliance — yes.

Q4: Can I file completely online from USA?

Yes. E-filing is mandatory and accessible worldwide through the IRD portal.

Q5: What if I don’t have TIN?

You must register online through IRD before filing.

Final Thoughts

Sri Lankan tax compliance for expats in USA depends primarily on:

✔ Physical presence (183-day rule)
✔ Income source
✔ Annual income thresholds

Understanding whether you are Resident or Non-Resident is the first and most critical step.

Failing to comply can lead to penalties and long-term complications. Proper planning ensures:

Peace of mind
Clean compliance history
No unexpected tax exposure

Need Professional Assistance?

If you are unsure about:

Your residency status
Worldwide income implications
Rental income taxation
Asset declarations

Contact taxcalculator.lk for expert guidance tailored for Sri Lankan expatriates.

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