Freelancers earning foreign income liable to pay 15% Tax
- CNL Reporter
- February 25, 2025
- News
- Freelancers earning foreign income liable to pay 15% Tax
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Freelancers and individuals in Sri Lanka who earn foreign exchange by providing services to external clients will be subject to a 15% services export tax, according to a tax expert.
Although initially listed as a corporate tax in the budget, amendments to the Inland Revenue Act confirmed that the tax also applies to individuals, stated Sarah Afker, Head of Tax Services at BDO Sri Lanka.
The tax will be applicable when the income is brought into Sri Lanka through the banking system. Previously, such earnings were exempt to encourage foreign exchange inflows.
Effective from April 1, 2025, all foreign-sourced income will be taxed at 15%. Meanwhile, under the revised individual income tax structure, earnings up to 1.8 million rupees remain tax-exempt, while the next 500,000 rupees will be taxed at 6%.
