Sri Lanka imposes mandatory tax on foreign workers

Sri Lanka imposes mandatory tax on foreign workers

Sri Lanka imposes mandatory tax on foreign workers

Written by Hassaan Shazuli

13 Aug, 2020 | 2:53 pm

COLOMBO (News1st): Foreign workers employed in Sri Lanka who earn more than Rs 3 million in a year would be liable to a mandatory tax, Sri Lanka’s tax authority has said.

The tax became mandatory after the Inland Revenue Department (IRD) revised the regulations of the Advance Personal Income Tax (APIT) imposed in April this year.

“Deduction of APIT is compulsory with effect from 01.04.2020 on the remuneration payments to…all non-resident employees and all resident but non-citizen employees,” an IRD notice read.

Initially, the tax was optional for resident workers and mandatory for non-resident Sri Lankan workers.

Accordingly, the IRD has instructed employers to deduct the tax from resident but non-citizen employees who had not given their consent since the tax was introduced.

Tax deduction should start from the month in which the total income up to that month exceeds Rs 3 million. “…such computed APIT must be paid on or before August 15, 2020” the notice added.

The tax would remain optional for workers who are dual citizens and hold Sri Lankan citizenship, according to the notice.

 

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