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In a dynamic landscape of taxation, staying abreast of regulations is crucial for individuals and businesses alike. Recently, the Sri Lankan government issued a Tax Alert, outlined in Gazette Notification No 2334/21 dated 31 May 2023. This notification introduces additional categories of individuals mandated to register under the Inland Revenue Act No 24 of 2017. This article delves into the specifics of these new requirements and discusses their implications for taxpayers. The collective expertise of our team has been instrumental in contributing significantly to the development of this article.
Part 1: Immediate Registration Obligations
Effective from 01 June 2023, several professional groups and individuals now have a mandatory registration obligation under the Inland Revenue Act. Let’s explore some of the key additions:
Expansion of Professional Groups: The notification encompasses various professional bodies, expanding the scope to include 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 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 are now obligated to 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.
Additional Classes of Persons Required to Register as a Tax Payer
A gazette notice dated 31st May 2023 has been issued...
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Part 2: Future Registration Obligations
Starting 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.
By comprehending these obligations and taking proactive steps to comply, businesses can avoid penalties and ensure smooth tax operations. It’s crucial for affected taxpayers to seek guidance from professionals or tax advisors to navigate these new regulations effectively.
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