Sri Lanka postponed the implementation of its 18% VAT on digital services provided by non-resident companies from October 1, 2025 to April 1, 2026. The delay comes after digital services providers requested additional time to address practical difficulties and prepare their compliance systems. 

The bottom line: Foreign digital service providers now have until April 1, 2026, to register for VAT in Sri Lanka and set up compliance systems. The 18% VAT will apply to B2C digital services such as cloud storage, online marketplaces, social media platforms, digital advertising, and subscription services.