Australia is home to over 100,000 Sri Lankans — and with the Australia-Sri Lanka Double Taxation Agreement firmly in place, Australian-based Sri Lankans are in a strong position to minimise double taxation. But only if they know how to use it correctly.
The Australia-Sri Lanka DTA: How It Works for You
Australia and Sri Lanka have a signed Double Taxation Agreement. For Sri Lankans in Australia, this means:
- Australian tax paid on income you also remit to Sri Lanka can be credited against your Sri Lanka 15% remittance tax liability
- At Australia’s lowest marginal rate of 19%, most remittances already exceed the 15% Sri Lanka threshold — meaning you owe nothing further to the Sri Lanka IRD
- At 32.5%, 37%, or 45% Australian tax rates, you are fully exempt from the Sri Lanka 15% remittance tax on that income
- Sri Lankan rental income, dividends, and interest remain taxable in Sri Lanka — but credits apply to avoid double counting
Reporting Foreign Income at CBSL Rates
When declaring overseas income in your Sri Lanka IRD return, the income must be converted to Sri Lankan rupees using Central Bank of Sri Lanka (CBSL) reference rates for the relevant period. For Australian dollar income, use the AUD/LKR CBSL rate — not the commercial rate you received at your bank. GDP Consultants handles this conversion correctly as part of every overseas filing.
The Deemed Residency Trap for Recent Arrivals in Australia
Sri Lankans who moved to Australia in the last 1–2 years on a permanent resident visa, partner visa, or skilled migration pathway frequently fall into Sri Lanka’s deemed residency trap. If you lived in Sri Lanka for 2+ consecutive years before migrating, you remain a deemed Sri Lanka tax resident until you achieve 365 days of continuous absence.
Many Sri Lankans who moved to Australia in 2023 or 2024 are still deemed residents for the 2025/26 year of assessment — meaning their worldwide income, including their Australian salary, is assessable in Sri Lanka. The DTA protects against double taxation, but you still need to file a Sri Lanka return and claim the credit correctly.
Sri Lanka Property Owned by Australian Residents
If you own property in Sri Lanka that generates rental income, a 14% final withholding tax applies. If you sell Sri Lankan property, a 15% capital gains tax applies on the gain. These obligations exist regardless of your residency status. GDP Consultants manages both the annual rental income filing and any CGT calculations for property sales remotely for Australian-based clients.
How to File Your Sri Lanka Return from Australia
Filing is done entirely online through the IRD’s e-services portal. You will need your TIN, income documents (Australian tax return, group certificate, bank statements), and any Sri Lanka income documentation. The deadline is 30 November 2026 for Y/A 2025/26.
Check your position with our free Sri Lanka Expat Tax Checker, and message us on WhatsApp if you need GDP Consultants to file on your behalf — fully remotely from Australia.
Written by Lal Kumarasiri, Chartered Accountant (ACA, MAAT), GDP Consultants Pvt Ltd. Questions about your specific situation? WhatsApp us or email info@taxcalculator.lk.