Sri Lanka Wealth Tax Guide 2026

Overview — Wealth and Indirect Taxes in Sri Lanka

Sri Lanka does not have a comprehensive wealth tax, net worth tax, or any annual tax on total assets. The country abolished its earlier wealth tax regime and has not reintroduced one. Taxpayers are not required to declare their net worth or pay tax on asset holdings. However, certain specific taxes apply to particular types of wealth or economic activities: annual property rates (local government), the Social Security Contribution Levy (SSCL) on large businesses, and sector-specific levies like the Betting and Gaming Levy. The Nation Building Tax (NBT) and the Shared Services Contribution Levy (SSCL — predecessor) were abolished under the 2024 amendments as part of broader tax reforms.

No Annual Wealth Tax

Sri Lanka does not impose an annual wealth tax on individuals or companies. Key facts:

• No tax on net worth (total assets minus liabilities)
• No tax on bank deposits, shares, bonds, or other financial assets held
• No tax on the value of personal residences or other real estate (beyond local property rates)
• No tax on luxury assets such as cars, jewellery, or art
• No requirement to file a wealth statement or net worth declaration

The absence of wealth tax makes Sri Lanka relatively attractive for high-net-worth individuals compared to countries like France, Spain, Norway, or Switzerland that impose annual wealth taxes.

Annual Property Tax (Local Government Rates)

The closest thing to a recurring wealth tax in Sri Lanka is the annual property rates levied by local municipal councils. These are not national taxes but local charges on immovable property. Key features:

• Levied by municipal councils, urban councils, and pradeshiya sabhas (local authorities)
• Based on the assessed annual rental value (ARV) of the property
• Rates typically range from 0.5% to 2% of the ARV
• Payment is semi-annual or annual
• Rates fund local services (waste collection, roads, street lighting)
• Different rates apply to residential, commercial, and industrial properties

Social Security Contribution Levy (SSCL) — 2.5%

The Social Security Contribution Levy (SSCL) was introduced as a replacement for the earlier Shared Services Contribution Levy. It is a levy on large businesses with annual turnover exceeding LKR 120 million. Key points:

• Rate: 2.5% on the taxable turnover of goods and services
• Threshold: Applies to businesses with annual turnover exceeding LKR 120 million
• Scope: Broadly covers the supply of goods and services (similar to VAT but with different exemptions)
• Exemptions: Exports, financial services, and certain essential goods may be exempt
• Collection: Businesses registered for SSCL must file returns and remit the levy to the IRD

SSCL is a consumption-based levy that effectively functions as an additional turnover tax on large businesses. It is not a wealth tax but is sometimes grouped with indirect taxes.

Betting and Gaming Levy

The Betting and Gaming Levy Act imposes a levy on casinos, betting establishments, and gaming operators in Sri Lanka. Key features:

• Casinos are subject to a monthly levy based on the number of gaming tables and gaming machines
• Betting establishments (e.g., horse racing, sports betting) pay a levy on turnover
• The levy rates are set by the government and may be revised periodically
• The levy is in addition to income tax payable by the operator
• Only licensed operators are subject to the levy; illegal gambling is not recognised

NBT Abolished (2024)

The Nation Building Tax (NBT) was abolished with effect from 1 January 2024 as part of the fiscal reforms under the IMF program. NBT was:

• A turnover tax of 2.5% on the supply of goods and services (similar to VAT but with a narrower base)
• Previously applied to businesses with turnover exceeding LKR 100 million
• Abolished to simplify the tax system and reduce compliance costs

The SSCL now covers some of the ground previously occupied by NBT, though with important differences in scope and rate.

FAQs

Is there a luxury tax in Sri Lanka?

Sri Lanka imposes certain excise taxes on luxury goods (e.g., motor vehicles, alcohol, tobacco) at the point of import or manufacture, but there is no recurring annual luxury tax on ownership.

Do I need to declare my foreign assets?

There is no wealth tax filing requirement. However, foreign income (including income from foreign assets) must be declared by Sri Lankan residents for income tax purposes.

What other indirect taxes exist?

Other indirect taxes include Customs Duty on imports, Excise Duty on alcohol, tobacco, and petroleum, and the Ports and Airports Development Levy (PAL) on certain imports.

Disclaimer

This guide provides general information about Sri Lankan wealth and indirect taxes for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Sri Lankan tax advisor or the Inland Revenue Department directly for advice specific to your situation. InvestmentKit does not provide tax advice.