The extent of the liability to Sri Lankan tax on earnings depends on the individual’s residence status in Sri Lanka. The maximum tax rate in Sri Lanka is 35 percent from the years of assessment 2006/07 to 2010/11, and 24 percent from the year of assessment 2011/12 and thereafter. With effect from 1 April 2008, all expatriate employees are taxed at the same tax rates applicable to resident employees.
Residents are taxed on worldwide income. Non-residents (including expatriate employees) are taxed on Sri Lankan-source income only. Profits and income derived from outside Sri Lanka by a dual citizen will be exempt from income tax in Sri Lanka. The tax year ends 31 March.
The official currency of Sri Lanka is the Sri Lanka Rupees (LKR).
Herein, the host country refers to the country to which the employee is assigned. The home country refers to the country where the assignee lives when he/she is not on assignment.