Sri Lanka Foreign Income Tax Calculator

Since 1 April 2025, yes. The exemption that previously applied to service exports and foreign source income was removed by the Inland Revenue (Amendment) Act, No. 02 of 2025. Income earned by a Sri Lankan resident from foreign services or foreign sources is now taxable, but where the payment is received in foreign currency and remitted through a bank to Sri Lanka, the maximum income tax rate is 15% rather than the full progressive rates.

A resident freelancer earning from overseas clients, paid in foreign currency and remitting through a bank, faces a maximum rate of 15% on the profits of that work. Tax applies to gains and profits, so deductible business expenses and capital allowances reduce the amount assessed. Personal relief of Rs 1,800,000 a year is also available, so smaller incomes can be taxed at less than 15% or not at all.

The 15% maximum rate is expressed as applying where payment is received in foreign currency and remitted through a bank to Sri Lanka. If that condition is not met, the concession does not apply on its terms and the normal progressive rates of up to 36% would apply instead. Because this depends on facts only you know, the calculator asks rather than assuming, and recalculates either way.

Where you have paid tax in the source country, you can enter it and the calculator offsets it against the estimated Sri Lankan tax on the same income, capped at that amount so the credit never creates a refund. Actual relief depends on the double tax treaty with that country, if any, and on the evidence you can produce. This calculator does not apply treaty-specific rules.

Use the rate that actually applied when the money reached you, which is normally the rate your bank used on the date of remittance — not today’s rate. Calculate.lk deliberately publishes no exchange rates, because a stale rate would produce a confidently wrong answer. Enter the rate from your own bank statement.

A person resident in Sri Lanka is generally taxed on their worldwide income, so income from remote work for a foreign employer falls within the Sri Lankan tax net. Whether it is treated as a service export attracting the 15% maximum rate depends on the nature of the arrangement and how you are paid. This is an area where the answer turns on your specific contract, so confirm it with a qualified tax adviser.

It is a maximum, and it applies band by band rather than as one flat percentage of everything you earn. After personal relief, the first Rs 1,000,000 of taxable qualifying income is taxed at 6% — the same first band as any other income. Only the amount above that is capped at 15%, replacing the higher bands (18%, 24%, 30%, 36%) that would otherwise apply. So a freelancer earning around Rs 3,600,000 a year, for example, pays roughly Rs 180,000 — 6% on the first Rs 1,000,000 of taxable income and 15% on the rest — not 15% of the whole amount.