Who Must Register for VAT in Sri Lanka

You are required to register for VAT if your business’s taxable supplies (sales) exceed the registration threshold within a 12-month period, or if you expect to exceed it. For the current, up-to-date threshold figure, see our dedicated VAT registration threshold guide — this figure has changed more than once recently, so always check the latest confirmed number before assuming.

You can also register voluntarily below the threshold, which is sometimes beneficial if most of your customers are VAT-registered businesses that can claim back the input tax you charge them.

Step 1: Confirm You Meet (or Choose to Meet) the Threshold

Total your taxable supplies over the last 12 months, or your realistic 12-month forecast for a new business. If you’re close to the threshold, it’s safer to register slightly early than to be found late during an audit.

Step 2: Gather Required Documents

• Business Registration Certificate (or Certificate of Incorporation for companies)
• Taxpayer Identification Number (TIN) — see our TIN registration guide if you don’t have one yet
• National Identity Card / passport of the proprietor or directors
• Proof of business address
• Financial projections or recent turnover figures

Step 3: Apply Through the IRD

VAT registration is processed by the Inland Revenue Department, either through the IRD e-Services portal or in person at your regional IRD office. You’ll complete the VAT registration application (Form VAT 01 or the current equivalent) and submit your supporting documents.

Step 4: Receive Your VAT Registration Number

Once approved, the IRD issues a VAT registration number. From your effective registration date, you are required to charge 18% VAT on applicable taxable supplies and issue compliant tax invoices — see our VAT invoice generator to get the new gazette-compliant format right from day one.

Step 5: Understand Your Ongoing Obligations

Once registered, you must file periodic VAT returns (typically monthly or quarterly, depending on your category), remit the VAT collected minus your input tax credits, and maintain proper VAT records. Missing filing deadlines triggers penalties even if no VAT is actually due for that period.

Common Mistakes

• Registering late after already crossing the threshold, triggering backdated liability
• Not issuing the new gazette-compliant invoice format
• Forgetting that voluntary registration is binding — you can’t easily de-register once turnover fluctuates

Need Help?

Check the current threshold and use our free tools at TaxCalculator.lk — including the VAT invoice generator and our full calculator suite.