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

A worked example for designers

Illustrative figures for a typical income mix for designers — freelance or business, foreign income — using the default amounts below. Your own numbers will differ; use the wizard above for your actual figures.

Platform payouts from Upwork, Fiverr or direct commissions rarely equal what the client actually paid — platform fees, currency conversion spreads and withdrawal charges are all deducted before the money reaches your bank, and only the amount that actually lands in a Sri Lankan account qualifies for the 15% service-export ceiling. Reconcile the platform's own earnings statement against your bank credit for every withdrawal; the difference is a legitimate business expense, not income you failed to report. VAT registration is compulsory only once turnover — not profit — crosses Rs. 60,000,000, a threshold most individual designers won't reach, but income tax filing obligations begin far earlier and are not linked to that number at all. Software subscriptions used for client work (design suites, stock asset libraries, project management tools) are deductible in the year paid; a new laptop, tablet or monitor is capital equipment claimed through allowances over its useful life instead. Where local branding commissions and foreign platform income both feature in a year, keep them on separate running totals from the start — the domestic work carries no ceiling and sits fully in your slab base, while the foreign portion is capped, and merging the two makes the calculation impossible to unpick later.

Common questions

Is Upwork or Fiverr income taxable in Sri Lanka?

Yes. Platform earnings are business income. Where the payment reaches you through a Sri Lankan bank as service-export income it qualifies for the 15% maximum rate; the obligation to declare it does not depend on the platform.

Do I need to register for VAT?

Only once turnover crosses the registration threshold, which is Rs. 60,000,000 per year. Income tax obligations start well before that.

Can I deduct software subscriptions and hardware?

Subscriptions used for client work are deductible in the year. Hardware is capital — claimed through capital allowances over its useful life rather than deducted outright.

Work out a single figure instead