As the wheels of taxation keep turning, it’s vital for individuals and businesses to stay informed and adhere to the latest regulations. In a recent development, the Sri Lankan government has issued a Tax Alert through Gazette Notification No 2334/21, dated 31 May 2023. This notification introduces additional classes of persons who are now required to register under the Inland Revenue Act No 24 of 2017. In this blog post, we will delve into the details of these new requirements and discuss their implications for taxpayers.
Part A: Immediate Registration Obligations
Effective from 01 June 2023, several professional groups and individuals are now obligated to register under the Inland Revenue Act. Let’s explore some of the key additions:
Expansion of Professional Groups:
The notification includes various professional bodies, such as medical practitioners, chartered accountants (CA Sri Lanka), management accountants (CMA Sri Lanka), engineers, bankers, architects, quantity surveyors, and attorneys-at-law.
Business and Property Owners:
The update also extends the registration requirement to individuals who have registered their businesses in Divisional Secretariats and those who have purchased immovable property in Sri Lanka on or after 01 April 2018.
Provident Fund Contributions:
Employees whose combined monthly contributions to any Provident Fund exceed LKR 20,000 must now register under the Inland Revenue Act.
Service Providers:
Any individual receiving payment of LKR 100,000 per month or LKR 1.2 million over a 12-month period for providing services in Sri Lanka must also register.
Part B: Future Registration Obligations
From 01 January 2024, the Inland Revenue Act extends the registration requirement to all individuals who are 18 years old or older as of 31 December 2023 or who turn 18 years old on or after 01 January 2024.
You can read more about it here:
Tax registration 2023
By understanding these obligations and taking proactive steps to comply, businesses can avoid penalties and ensure smooth tax operations. It’s crucial for affected taxpayers to consult with professionals or tax advisors to navigate these new regulations effectively.
