Tax & Circulars

The Sri Lanka Accounting and Auditing standards Act No. 15 of 1995 has empowered the Accounting Standards Committee to recommend the Sri Lanka Accounting Standards for the adoption in the country through the Council of the Institute of Chartered Accountants of Sri Lanka.

The Sri Lanka Auditing Standards are based on the International Standards on Auditing (ISA) published by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC), with slight modifications to meet local conditions and needs. Hence compliance with the Sri Lanka Auditing Standards ensures compliance in all material respects with the International Standards on Auditing.

Income tax is charged on the basis of the provisions under the Inland Revenue Act, No. 24 of 2017 as amended by the Inland Revenue (Amendment) Act, No. 10 of 2021, Inland Revenue (Amendment) Act, No. 45 of 2022, Inland Revenue (Amendment) Act, No. 04 of 2023, Inland Revenue (Amendment) Act, No. 14 of 2023 and Inland Revenue (Amendment) Act, No. 02 of 2025. The Inland Revenue Act provides the legal authority to charge, levy and collect income tax on the gains and profits of every person, which arose or is arising to such person for every year of assessment commencing after 1st of April, 2018.