---
oa_review_kit: v1
guide_slug: sri-lanka-vat
guide_version: sri-lanka-vat@2026-04-13T17:55:45.822Z
archetype: vat_gst
---

# Review kit: Sri Lanka VAT

Thank you for reviewing this Guide. This kit is one file with three parts: how
to use it, an interview prompt for your AI, and the Guide itself.

## How to use this kit (3 steps, about 15 minutes)

1. Open the AI you already use (ChatGPT, Claude, Gemini, anything that reads
   markdown) and paste in everything from "INTERVIEW PROMPT" below, including
   the Guide at the end.
2. Your AI interviews you like a colleague, one question at a time. Just talk:
   war stories, walk-throughs, the mistakes you catch. No writing required.
3. Your AI writes your answers up as a single markdown file. Hand it back at
   openaccountants.com/skills/sri-lanka-vat/handback (also linked from the Guide
   page: "Hand back your file"). What you added is published under your name
   and credential.

If your AI cannot produce the exact output format, hand back whatever you have:
a revised Guide file, a worksheet, or plain notes. We take those too, and a
person reviews them by hand. The format below is the one we can apply straight
away.

---

# INTERVIEW PROMPT (paste from here down into your AI)

You are interviewing a practising accountant about how they actually do the
work covered by the attached Guide ("Sri Lanka VAT", slug `sri-lanka-vat`).
Interview them like a colleague doing a handover. Do not lecture. Ask ONE
question at a time and wait for the answer. Chase war stories and specifics:
what kind of client, which portal step, how big the penalty was.

The rates, thresholds, and citations are our job; we refresh those from primary
sources. Capture ONLY what is NOT derivable from law:

- order of operations, and what a wrong order corrupts
- what to ask a client before computing anything
- what to assume when a fact is unknown, and how it gets flagged
- the most-missed traps, with penalty size and who falls in
- how the portal or filing channel actually behaves
- what has to reconcile before anyone signs
- when to refuse the work and hand it to a human specialist

If the accountant corrects a rate, threshold, or deadline in the Guide along
the way, record it in the FACT CORRECTIONS table, but do not steer the
interview toward numbers.

## Questions to work through

Ask these in order, one at a time. Skip any the accountant has already covered;
follow up where a story has specifics worth pinning down. Each question is
tagged with the method slot(s) it feeds.

1. [sequence] Walk me through the last VAT return you prepared, start to finish. What did you open first, and why that order?
2. [intake_questions] [evidence] A new client hands you nothing but a bank statement. What do you do before you'll classify a single line?
3. [pattern_library] Which bank-statement line gets misclassified most often in your experience? What does it look like and where should it actually go?
4. [scope_gate] Tell me about a client you refused or referred out. What about their VAT situation made you stop?
5. [trap] When you review a return someone else drafted, what mistake do you catch most often?
6. [conservative_default] When you can't tell if a sale is domestic or cross-border, what do you assume, and how do you mark it?
7. [cross_check] Before you sign, what has to reconcile with what, and how close is close enough?
8. [filing_mechanics] Walk me through filing on the actual portal. What surprises first-timers: the order of forms, what locks, what you can't undo?
9. [judgment_rule] Ever had a client on a simplified scheme where the "simplification" made things worse? How do you decide who belongs on it?
10. [trap] What's the real penalty story you tell clients, the one that actually happened?
11. [evidence] Which claims will you draft from a bank statement but never file without the underlying paper?
12. [unsettled_law] Anything in VAT right now you deliberately won't finalise because the rules are moving?

## Method slots (for tagging the write-up)

- `scope_gate` (Scope gate and refusals): when to stop and send the client to a human
- `sequence` (Order of operations): what order to do things in, and what a wrong order corrupts
- `intake_questions` (Client intake questions): what to ask a client before computing
- `evidence` (Documents and evidence): which documents to insist on, and what is draft-grade vs file-grade
- `judgment_rule` (Judgment rules): how a practitioner actually picks when the law allows two routes
- `conservative_default` (Conservative defaults): what to assume when a fact is unknowable at draft time
- `trap` (Traps and most-missed items): the mistakes everyone makes, what they cost, and who falls in
- `filing_mechanics` (Portal and filing mechanics): how submission actually works: channel, order, what locks
- `cross_check` (Cross-checks before signing): what has to reconcile with what before delivery, and how close is close enough
- `pattern_library` (Pattern library): how messy real-world data (bank lines, payout platforms) maps to tax categories
- `edge_case` (Edge-case playbook): the client situations that change the method, not just the numbers
- `unsettled_law` (Unsettled-law flags): what not to finalise right now, and why
- `handback_protocol` (Hand-back protocol): what the finished working paper contains and who reviews it

## Output format: oa-handback v1

When the interview is done, write the answers up as ONE markdown file in
exactly this shape. Fill in the reviewer's real name, credential, and email
(ask for them at the end if they have not come up). Every method block gets a
`### [method:<slot>]` heading where `<slot>` is one of the 13 slot ids
above. Keep `guide_slug` and `guide_version` exactly as given. Omit any
section the interview produced nothing for, but keep the headings that remain
exactly as shown. The `fact_key` column may be left blank when unknown.

```markdown
---
oa_handback: v1
guide_slug: sri-lanka-vat
guide_version: sri-lanka-vat@2026-04-13T17:55:45.822Z
reviewer_name: <full name>
reviewer_credential: <credential>        # free text: CPA, EA, ACCA, Steuerberater...
reviewer_email: <email>
verdict: <approve | corrections | unable>
---

## METHOD

### [method:filing_mechanics] <short title for this block>
<prose: the method block, written in second person, imperative>

### [method:intake_questions] <short title for this block>
- <question 1>
- ...

## FACT CORRECTIONS
| fact_key | current | correct | source |
|---|---|---|---|
| <fact key if known, else blank> | <value in the Guide> | <correct value> | <cite> |

## FLAGS
- [unsettled] <what not to finalise, and why>
- [refer] <situations to escalate to a human>

## NOTES
<anything that did not fit a method slot or a fact correction>
```

If for any reason you cannot produce this exact format, output the accountant's
corrections and methods as clear plain notes instead. The hand-back page
accepts plain notes and revised Guide files too; this format is an
optimization, never a gate.

---

# THE GUIDE UNDER REVIEW

<!-- guide: sri-lanka-vat · version: sri-lanka-vat@2026-04-13T17:55:45.822Z -->

---
name: sri-lanka-vat
description: Use this skill whenever asked to prepare, review, or classify transactions for a Sri Lanka VAT return for any client. Trigger on phrases like "Sri Lanka VAT", "IRD return", "CGIR filing", or any request involving Sri Lanka VAT. MUST be loaded alongside vat-workflow-base v0.1 or later. ALWAYS read this skill before touching any Sri Lanka VAT work.
jurisdiction: LK
domain: vat-gst
tax_year: 2025
---

# sri-lanka-vat

## Section 1 — Quick reference

**Quick reference table**

| Field | Value |
| --- | --- |
| Country | Sri Lanka (Democratic Socialist Republic of Sri Lanka) |
| Standard rate | 18% (effective 1 January 2024) |
| Zero rate | 0% (exports, specified essential goods) |
| Exempt | Financial services, healthcare, education, residential rent, unprocessed agriculture |
| Return form | Monthly VAT return (via IRD e-filing) |
| Filing portal | https://www.ird.gov.lk (IRD e-Services) |
| Authority | Inland Revenue Department (IRD) |
| Currency | LKR (Sri Lankan Rupee) |
| Filing frequency | Monthly |
| Deadline | Last business day of the month following the tax period |
| Registration threshold | LKR 80 million per annum (or LKR 20 million per quarter) |
| Companion skill | vat-workflow-base v0.1 or later — MUST be loaded |
| Validated by | Pending local practitioner validation |

**Conservative defaults**

| Ambiguity | Default |
| --- | --- |
| Unknown rate on a sale | 18% |
| Unknown VAT status of a purchase | Not deductible |
| Unknown counterparty location | Domestic Sri Lanka |
| Unknown business-use proportion | 0% recovery |

## Section 2 — Required inputs and refusal catalogue

### Required inputs

**Minimum viable** — bank statement for the month. Acceptable from: BOC (Bank of Ceylon), People's Bank, Commercial Bank, HNB (Hatton National Bank), Sampath Bank, Seylan Bank, DFCC, NDB, Nations Trust, or any other.

### Sri Lanka-specific refusal catalogue

- **R-LK-1 — BOI enterprise** — Trigger: client under Board of Investment agreement with tax holidays. Message: "BOI enterprises have bespoke tax exemptions. Please escalate."  _(R-LK-1)_
- **R-LK-2 — Social Security Contribution Levy (SSCL) interaction** — Trigger: SSCL applies alongside VAT. Message: "SSCL is a separate levy that may affect pricing and compliance. Verify current status (SSCL was suspended/reintroduced periodically)."  _(R-LK-2)_
- **R-LK-3 — Simplified VAT regime** — Trigger: client on simplified regime. Message: "Simplified VAT has different filing requirements. Please escalate."  _(R-LK-3)_

## Section 3 — Supplier pattern library

### 3.1 Sri Lankan banks (fees exempt — exclude)

**Sri Lankan banks pattern table**

| Pattern | Treatment | Notes |
| --- | --- | --- |
| BOC, BANK OF CEYLON | EXCLUDE for bank charges | Exempt |
| PEOPLES BANK, PEOPLE'S BANK | EXCLUDE for bank charges | Same |
| COMMERCIAL BANK, COMBANK | EXCLUDE for bank charges | Same |
| HNB, HATTON NATIONAL | EXCLUDE for bank charges | Same |
| SAMPATH, SEYLAN, NDB, DFCC | EXCLUDE for bank charges | Same |
| NATIONS TRUST | EXCLUDE for bank charges | Same |
| INTEREST, LOAN, REPAYMENT | EXCLUDE | Out of scope |

### 3.2 Government (exclude)

**Government pattern table**

| Pattern | Treatment | Notes |
| --- | --- | --- |
| IRD, INLAND REVENUE | EXCLUDE | Tax payment |
| CUSTOMS, SRI LANKA CUSTOMS | EXCLUDE | Duty |
| EPF, ETF | EXCLUDE | Employee provident/trust fund |
| COMPANY REGISTRAR | EXCLUDE | Registration fee |

### 3.3 Utilities

**Utilities pattern table**

| Pattern | Treatment | Notes |
| --- | --- | --- |
| CEB, CEYLON ELECTRICITY | Domestic 18% | Electricity |
| LECO | Domestic 18% | Electricity (Colombo) |
| NWS&DB, NATIONAL WATER | Domestic 18% | Water |
| SLT, SRI LANKA TELECOM, DIALOG, MOBITEL | Domestic 18% | Telecoms |
| HUTCH, AIRTEL LK | Domestic 18% | Same |

### 3.4 Digital payments

**Digital payments pattern table**

| Pattern | Treatment | Notes |
| --- | --- | --- |
| FRIMI, GENIE, IPAY | EXCLUDE for fees | Financial service |

### 3.5 SaaS and international services

**SaaS pattern table**

| Pattern | Treatment | Notes |
| --- | --- | --- |
| GOOGLE, MICROSOFT, META, AWS | Self-assess 18% | Non-resident |
| ZOOM, SLACK, CANVA | Self-assess 18% | Same |

### 3.6 Payroll and exclusions

**Payroll pattern table**

| Pattern | Treatment | Notes |
| --- | --- | --- |
| SALARY, WAGES | EXCLUDE | Outside VAT scope |
| OWN TRANSFER, INTERNAL | EXCLUDE | Internal |
| DIVIDEND | EXCLUDE | Out of scope |
| CASH WITHDRAWAL | TIER 2 — ask | Default exclude |

## Section 4 — Worked examples

### Example 1 — Standard domestic sale at 18%

**Input line:** `05.04.2026 ; COLOMBO TRADING PVT ; CREDIT ; Invoice LK-041 ; LKR 1,180,000`

**Reasoning:** Domestic. 18%. Net = LKR 1,000,000, VAT = LKR 180,000.

**Example 1 result table**

| Date | Counterparty | Gross | Net | VAT | Rate | Field | Default? | Excluded? |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 05.04.2026 | COLOMBO TRADING | +1,180,000 | +1,000,000 | 180,000 | 18% | Output | N | — |

### Example 2 — Export, zero-rated

**Input line:** `15.04.2026 ; UK BUYER LTD ; CREDIT ; Tea export ; LKR 5,000,000`

**Example 2 result table**

| Date | Counterparty | Gross | Net | VAT | Rate | Field | Default? | Excluded? |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 15.04.2026 | UK BUYER LTD | +5,000,000 | +5,000,000 | 0 | 0% | Zero-rated | N | — |

### Example 3 — Non-resident digital service

**Input line:** `18.04.2026 ; AWS ; DEBIT ; Cloud hosting ; LKR -60,000`

**Example 3 result table**

| Date | Counterparty | Gross | Net | VAT | Rate | Field | Default? | Excluded? |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 18.04.2026 | AWS | -60,000 | -60,000 | 10,800 | 18% | Output + Input | N | — |

### Example 4 — Bank charges

**Input line:** `30.04.2026 ; BOC ; DEBIT ; Monthly charge ; LKR -1,000`

**Example 4 result table**

| Date | Counterparty | Gross | Net | VAT | Rate | Field | Default? | Excluded? |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 30.04.2026 | BOC | -1,000 | — | — | — | — | N | "Exempt" |

## Section 5 — Tier 1 classification rules (compressed)

### 5.1 Standard rate 18% — Default for all taxable supplies (from 1 Jan 2024; previously 15%).

- **Standard rate** — 18% (Default for all taxable supplies (from 1 Jan 2024; previously 15%))

### 5.2 Zero rate — Exports, specified essential goods.

- **Zero rate** — 0% (Exports, specified essential goods)

### 5.3 Exempt — Financial services, healthcare, education, residential rent, unprocessed agriculture.

- **Exempt supplies** — Financial services, healthcare, education, residential rent, unprocessed agriculture

### 5.4 Input tax credit — Valid tax invoice with TIN required. Business purpose. Apportionment if mixed.

- **Input tax credit** — Valid tax invoice with TIN required. Business purpose. Apportionment if mixed.

### 5.5 Blocked input — Personal consumption, entertainment, passenger vehicles.

- **Blocked input** — Personal consumption, entertainment, passenger vehicles

### 5.6 Imports — VAT at 18% on CIF plus duty.

- **Imports** — VAT at 18% on CIF plus duty

### 5.7 Reverse charge — Non-resident services: self-assess 18%.

- **Reverse charge** — Non-resident services: self-assess 18%

### 5.8 Registration — Mandatory if turnover exceeds LKR 80M/year or LKR 20M/quarter.

- **Registration threshold** — LKR 80M/year or LKR 20M/quarter (Mandatory registration)

## Section 6 — Tier 2 catalogue (compressed)

### 6.1 Vehicle costs — Default: 0%.

- **Vehicle costs** — Default: 0%

### 6.2 Entertainment — Default: block.

- **Entertainment** — Default: block

### 6.3 SaaS entities — Default: self-assess 18%.

- **SaaS entities** — Default: self-assess 18%

### 6.4 BOI enterprise status — Default: flag. Question: "BOI agreement in force?"

- **BOI enterprise status** — Default: flag. Question: "BOI agreement in force?"

### 6.5 SSCL interaction — Default: flag. Question: "Is SSCL currently in force?"

- **SSCL interaction** — Default: flag. Question: "Is SSCL currently in force?"

### 6.6 Cash withdrawals — Default: exclude.

- **Cash withdrawals** — Default: exclude

## Section 7 — Excel working paper template

Per vat-workflow-base Section 3, with Sri Lanka fields: Output 18%, Zero-rated, Exempt, Input domestic, Input imports, Net VAT.

## Section 8 — Bank statement reading guide

BOC, People's Bank, Commercial Bank exports CSV/PDF. LKR primary. Sinhala/Tamil descriptions possible. Internal transfers: exclude. Convert foreign currency at CBSL rate.

## Section 9 — Onboarding fallback

### 9.1 TIN — "What is your IRD TIN?"

- **TIN** — "What is your IRD TIN?"

### 9.2 Filing period — Monthly. "Which month?"

- **Filing period** — Monthly. "Which month?"

### 9.3 Industry — "What does the business do?"

- **Industry** — "What does the business do?"

### 9.4 Exports — "Do you export?"

- **Exports** — "Do you export?"

### 9.5 BOI status — "Are you under a BOI agreement?"

- **BOI status** — "Are you under a BOI agreement?"

### 9.6 Credit brought forward — Always ask.

- **Credit brought forward** — Always ask

## Section 10 — Reference material

### Sources

1. Sri Lanka Value Added Tax Act No. 14 of 2002 (as amended). 2. Inland Revenue (Amendment) Act. 3. IRD e-Services portal.

### Known gaps

1. BOI enterprises refused. 2. SSCL status changes frequently. 3. Rate changed from 15% to 18% in Jan 2024 — verify for transitional periods.

### Change log

- v2.1 (June 2026): Added jurisdiction/verification frontmatter; removed duplicate disclaimer; standard rate 18% re-confirmed against IRD YA 2025/26 tax chart.
- v2.0 (April 2026): Full rewrite to Malta v2.0 ten-section structure.

## Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.

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