Am I taxed on takings or on profit?

On profit — takings less the expenses incurred in earning them, plus capital allowances on business assets. Personal drawings are not an expense.

When does VAT registration become compulsory?

Once taxable turnover crosses Rs. 60,000,000 in a twelve-month period. VAT is separate from income tax and has its own filing cycle.

Do I file as an individual or as a business?

A sole proprietorship is not a separate taxpayer — the profit goes on your individual return. A partnership files its own return and allocates the divisible profit to each partner.

Income tax for business owners in Sri Lanka — Y/A 2025/2026

Trading profit after your business expenses, self-assessed with nothing withheld at source. Work out which schedules you file, what quarterly instalments apply, and what is due at year end.

Identify your tax profile

What did you earn this year?

Pre-filled for your profession — add what applies, skip what doesn't.

Pre-selected for Shop / business owner — add or remove anything that doesn't match your year.

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Common questions

Am I taxed on takings or on profit?: On profit — takings less the expenses incurred in earning them, plus capital allowances on business assets. Personal drawings are not an expense.
When does VAT registration become compulsory?: Once taxable turnover crosses Rs. 60,000,000 in a twelve-month period. VAT is separate from income tax and has its own filing cycle.
Do I file as an individual or as a business?: A sole proprietorship is not a separate taxpayer — the profit goes on your individual return. A partnership files its own return and allocates the divisible profit to each partner.

Work out a single figure instead

Income tax (IIT)

Estimate your annual liability across salary, freelance, interest and investment income — with 2025/2026 reliefs applied.

Quarterly installment

If you're self-employed: estimate your Q1–Q4 installments based on prior-year liability or current-year forecast.

VAT

Output VAT vs. input VAT, threshold check (Rs. 60M / quarter), schedule-by-schedule.