Export Tax Calculator Sri Lanka

No. All exports of goods and qualifying services from Sri Lanka are zero-rated under the Value Added Tax Act. This means the output VAT rate applicable is 0%, so no VAT is charged to the overseas buyer. Despite the zero rate, VAT-registered exporters can still claim input tax credits on their local purchases related to the exported goods. These input tax credits are claimed in the VAT return via the IRD's RAMIS portal; exporters whose direct exports exceeded 50% of total supplies in the preceding calendar year can have any excess refunded under the Risk-Based Refund Scheme, while others carry it forward against future output VAT. Maintaining complete purchase records is essential for a successful input tax credit refund claim.

The Export Development Board (EDB) CESS is a levy collected by the EDB on specified export commodities at the time of export. It is calculated as a fixed amount per unit (e.g., per kilogram for tea, per nut for seed coconuts) rather than as a percentage of value. For Ceylon Tea (whole leaf or broken grades), the EDB CESS is Rs. 4.00 per kg. A separate Medical CESS of Rs. 0.35 per kg also applies to tea exports. For seed coconuts, the EDB CESS is Rs. 10.00 per nut. Rates for other commodities vary and are set by the EDB from time to time.

Under the Inland Revenue Act No. 24 of 2017 and subsequent amendments, companies that qualify as export-oriented businesses and remit their foreign exchange earnings through a licensed commercial bank in Sri Lanka are eligible for a concessionary corporate income tax rate of 15%. The standard corporate tax rate is 30% (and up to 36% for certain entities with surcharges). The key qualifying conditions include: (1) the income must be derived from the export of goods or qualifying services, (2) the foreign exchange earnings must be received through a licensed Sri Lankan bank, and (3) the company must maintain adequate records to demonstrate the remittance. Companies should confirm their eligibility with a tax advisor as specific conditions apply.

The Sri Lankan government has announced a multi-year plan to phase out CESS on over 2,600 Harmonized System (HS) codes as part of a broader trade liberalization and tariff rationalization strategy. The phase-out is being implemented in stages between 2026 and 2029. The intent is to reduce the cost of exports, improve competitiveness of Sri Lankan goods in international markets, and align the tariff structure with trade agreement commitments. Exporters should monitor the annual budget announcements and gazette notifications to understand which HS codes are affected and from which date their applicable CESS rate is reduced or eliminated.

For export CESS, the EDB collects dues at the point of export through Sri Lanka Customs. Exporters must present the relevant export declaration (customs entry) and supporting shipping documents. For VAT zero-rating, exporters must maintain: (1) a valid sales invoice to the overseas buyer, (2) a bill of lading or airway bill confirming export, (3) customs export entry (Customs E1 or equivalent), and (4) bank credit advice confirming foreign exchange remittance. These documents are required for input tax credit refund claims filed via RAMIS and for audit purposes by the Inland Revenue Department.