Sri Lanka Tax Agency Issues Circular Introducing Risk-Based Regime for VAT Refunds

The Sri Lankan Inland Revenue Nov. 19 issued Circular No. SEC/2025/E/6, introducing the risk-based refund scheme (RBRS) for VAT refunds, effective from the taxable period beginning Oct. 1. The circular includes that: 1) the RBRS replaces the simplified VAT regime and applies to exporters and registered persons supplying more than 50 percent of their goods or services to strategic or specified projects; 2) refund claims are classified as low, medium, or high risk based on compliance history, audit records, and other criteria; 3) refunds are transferred directly to the taxpayer’s registered bank account; 4) eligible taxpayers must submit detailed VAT ...