Sri Lanka cuts VAT on apartments to 6-pct, small condos exempted

ECONOMYNEXT – Sri Lanka has cut a value added tax on condominiums to 6 percent and has exempted small apartments priced below 25 million rupees.

The input credit for condominiums will be deemed to be 5 percent.

VAT will not be charged if the unit price is below 25 million rupees.

VAT will also not be charged where the agreement to sell was executed under the Notaries Ordinance before the VAT Amendment Act became effective, or where certificates of conformity was obtained before the effective date.

Goods supplied by contractors for projects abroad will be considered exports.

VAT payments dates will be the 20th of the month following the month relevant month end.

In other changes to the VAT Act, the piece rate tax applicable to the domestic sale of garments by BOI companies will be raised to 100 rupees from 75.

Rice bran oil made out of domestic rice will be exempted from VAT.

Worsening discretion under the law on the value of imported goods, the Minister of Finance will be authorized to prescribe the basis for chargeability of VAT of certain goods specified by the Minister by regulations. (Colombo/Oct24/2019)