Sri Lanka Postpones Revised VAT Invoice Format Amid Wider VAT Reforms

Sri Lanka’s Inland Revenue Department (IRD) has postponed the effective date of the country’s revised VAT invoice format from July 1, 2026, to October 1, 2026. The change was introduced through Gazette Extraordinary No. 2500/106, issued on August 6, 2026, which amends Gazette Extraordinary No. 2481/22 without altering the invoice format specifications themselves; all other matters set out in that earlier gazette remain unchanged.

The format itself was first prescribed under Gazette No. 2463/05 and was later revised on March 27, 2026, through Gazette No. 2481/22, which introduced clarifications and greater flexibility for issuers.

Key Changes to the Invoice Format

From October 1, 2026, the revised format will apply to all VAT-registered persons issuing tax invoices for taxable supplies in Sri Lanka. Key changes include:

• Supplier and purchaser details – Tax Identification Numbers (TIN) must be nine-digit numbers issued by the Commissioner General of Inland Revenue; telephone numbers, previously mandatory, are now optional.
• Invoice sequence – the YYMMM_QQQQ_XXXXX structure is retained, where MMM denotes the first three letters of the calendar month, QQQQ an alphanumeric code identifying an organizational entity or classification, and XXXXX the invoice serial number; the sequence should generally remain continuous but may restart annually or monthly in certain cases.
• Purchaser detail placement – purchaser details may appear either in the top right-hand corner of the invoice or below the supplier’s particulars.
• Date and place of supply – “date of delivery” is renamed “date of supply,” and the place-of-supply field becomes optional, to be used only where the place of invoice issuance differs from where the goods or services actually originate.
• Amounts in LKR – the value of supply must be stated in Sri Lankan Rupees to two decimal places, inclusive of cents; stating the total consideration in words is now optional.
• Mode of payment – where the actual payment method is not yet known at issuance, the expected mode of payment may be stated instead.
• Design flexibility – suppliers may adapt the specimen format, provided the mandated specifications are met, including adding rows or columns and incorporating logos, trademarks, or other headers and footers.

Other VAT Policy Developments

Separately, Sri Lanka’s NPP government has dropped a proposal to lower the VAT registration threshold from Rs. 60 million to Rs. 36 million, which was intended to broaden the tax base to include more SMEs and small traders. The plan faced strong opposition from business groups and opposition parties, who raised concerns over compliance burdens, digital record-keeping capacity, and potential job losses.

Other VAT changes remain under consideration, including raising VAT on financial services from 18% to 20.5% and taxing digital services supplied by non-resident companies at 18%.

There’s more you should know about global e-invoicing changes – learn more about the new and upcoming regulations.