Sri Lankan Income Tax (APIT/PAYE): Rates and Departure
Sri Lanka's Inland Revenue Act No. 24 of 2017 (as amended by Finance Acts and the Inland Revenue (Amendment) Act No. 45 of 2022) governs income tax. APIT (Advance Personal Income Tax) rates for 2026: 6% (up to LKR 500,000/month), 12% (LKR 500,001–750,000), 18% (LKR 750,001–1,250,000), 24% (LKR 1,250,001–2,000,000), 30% (LKR 2,000,001–3,000,000), 36% (above LKR 3,000,000/month). Note: the 2022 Inland Revenue Amendment significantly increased rates from the previous 6–24% scale. Employment income: withheld monthly by employer (APIT — formerly PAYE). Annual tax return: due November 30 for the year ending March 31 (Sri Lanka uses April 1–March 31 tax year). IRD e-services (ird.gov.lk): online filing and payment available. Tax residency: Sri Lankan tax residency if present for 183+ days in the year, or if Sri Lanka is the permanent place of abode. Non-resident taxation: 14% NHIL (National Health Insurance Levy — added from 2023) + 14% income tax on dividends; 14% on interest; 14% on royalties. Note: the NHIL and SSCL (Social Security Contribution Levy — 2.5%) have been added since the 2022 reforms — verify current applicable charges at ird.gov.lk. Final return: file for the tax year of departure (April 1–March 31). If departing mid-year, estimate the departure-year income. IRD TIN (Taxpayer Identification Number): maintain active for EPF/ETF withdrawal correspondence and any ongoing Sri Lankan-source income.
EPF (Employees' Provident Fund) and ETF: Departure Withdrawals
EPF (Employees' Provident Fund — administered by Central Bank of Sri Lanka — cbsl.gov.lk): Sri Lanka's mandatory occupational savings fund. Contributions: employee 8% of monthly remunerable earnings; employer 12%. Total: 20% of salary into your EPF individual account. EPF balance: accumulated in individual accounts managed by Central Bank. EPF withdrawal on departure: Sri Lanka's EPF Act (EPF Act No. 15 of 1958, as amended) allows lump-sum withdrawal on: (1) emigration (permanently leaving Sri Lanka); (2) reaching age 55 (early retirement); (3) reaching age 60 (normal retirement). For permanent emigration: submit EPF Form T (or current applicable form) to the Central Bank EPF Department with: passport, visa/residence permit of destination country, Employment Certificate from last employer, TIN (IRD registration). Processing: 30–60 working days. Amount: full accumulated balance including employer contributions + interest earned. Interest: EPF pays annual interest — historically 9–11% (varies by year; Central Bank sets the rate). Tax on EPF withdrawal: amounts received on retirement/emigration are generally treated as terminal benefits and may qualify for reduced tax treatment — verify with IRD. ETF (Employees' Trust Fund — administered by Department of Labour — labourmin.gov.lk): separate from EPF. Employer contribution: 3% of monthly earnings (employer only — no employee contribution). ETF balance belongs to the employee. Withdrawal: similarly available on emigration or retirement. Apply to ETF Board with same documentation as EPF. Processing: 15–30 working days. Amount: full accumulated ETF balance + interest.
LKR Currency and International Transfers Post-2022
Sri Lanka's rupee (LKR) suffered a catastrophic depreciation in 2022: from approximately LKR 200/USD (January 2022) to LKR 360/USD (mid-2022 peak crisis). Post-IMF stabilisation (2023–2024): LKR recovered to approximately LKR 295–310/USD range (verify current rate at cbsl.gov.lk). CBSL foreign exchange framework: Sri Lanka had significant FX controls during the 2022 crisis (import restrictions, mandatory FX repatriation rules). Post-2023 IMF compliance: CBSL has progressively liberalised FX regulations. Current (2026): the FX liberalisation measures allow greater flexibility for outgoing transfers. Key remaining requirements: documentation of origin of funds; FX Form required for transfers above USD 10,000. EPF/ETF withdrawal: paid in LKR to a Sri Lankan bank account. Convert to USD/GBP/AUD at your bank. International transfer: major Sri Lankan banks (Bank of Ceylon, People's Bank, Sampath Bank, Commercial Bank of Ceylon, HNB, NDB) provide SWIFT wire transfers. Diaspora remittances: Sri Lanka has specifically supported diaspora inflows — outgoing transfers may have slightly more scrutiny. Wise from Sri Lanka: Wise supports LKR transfers where available — verify current LKR Wise functionality. For EPF/ETF proceeds: bank wire is the standard route.
Sri Lankan Real Estate and Non-Resident Property
Sri Lankan real estate has restrictions on foreign ownership. Sri Lankan citizens can own property freehold. Non-citizen foreigners: may not directly own freehold land in Sri Lanka (Foreign Exchange Act and Land (Restrictions on Alienation) Act 2014 apply). Exceptions: leasehold up to 99 years; ownership through a Sri Lankan company (with foreign shareholding up to 100% for certain commercial categories). Sri Lankan diaspora: Sri Lankan nationals living abroad who retain Sri Lankan citizenship are generally treated as Sri Lankan citizens for property ownership purposes — full freehold ownership rights. Non-resident Sri Lankan property owners: retain Sri Lankan citizenship and property rights. Rental income: taxable in Sri Lanka at 14% for non-residents (withholding by tenant if registered company). Capital gains: Sri Lanka reintroduced CGT under the 2022 amendments at 10% on gains from realisation of capital assets (including real estate). First LKR 600,000 gain: exempt. Non-residents: 10% CGT applies on Sri Lankan property gains. Transfer tax and stamp duty: stamp duty on property transfers — 3% of value (buyer). Notarial conveyance required. Annual valuation assessor's office charges: property assessment rates levied by local authorities (municipal/urban/pradeshiya sabha). As non-resident, retain a Sri Lankan attorney-at-law with a Power of Attorney for property management and IRD filings.