Tax Invoice Format in Sri Lanka: IRD Compliance, 18% VAT & Sample Guide
A comprehensive practical guide for Sri Lankan registered businesses, service providers, and contractors. Learn the mandatory Inland Revenue Department (IRD) requirements for issuing legal Tax Invoices, VAT & SSCL calculation rules, and how to create compliant documents online.
1. Mandatory Requirements for a Legal Tax Invoice in Sri Lanka
Under Section 20 of the Value Added Tax Act No. 14 of 2002 (as amended) and Inland Revenue Department (IRD) regulations, a registered person making a taxable supply must issue a "Tax Invoice" containing the following statutory particulars:
- Registered business or legal company name
- Physical registered address in Sri Lanka
- Taxpayer Identification Number (TIN)
- VAT Registration Number (12 digits)
- Contact telephone and business email
- The words "TAX INVOICE" prominently displayed
- A unique, non-repeating sequential serial number
- Date of invoice issuance
- Recipient business name and address
- Recipient's VAT/TIN number (if claiming input tax)
2. Calculating 18% VAT and 2.5% SSCL on Invoices
Sri Lankan tax law requires precise sequencing when both the Social Security Contribution Levy (SSCL) and Value Added Tax (VAT) are applicable:
Step 2: SSCL (2.5%) = 2.5% × Chargeable Turnover
Step 3: VAT Base = Chargeable Base + SSCL (where SSCL is compounded)
Step 4: VAT (18%) = 18% × VAT Base
Step 5: Total Invoice Value = Chargeable Base + SSCL + VAT
Important Note: If your annual business turnover is below the IRD mandatory VAT registration threshold, you must not display the title "Tax Invoice" or levy VAT. Instead, issue a standard Commercial Invoice or Quotation.
3. Converting a Quotation into an Official Tax Invoice
The typical commercial workflow in Sri Lanka proceeds through three defined stages:
- Quotation / Estimate Stage: You submit itemized BOQ specifications with 30-day price validity and advance payment terms. No IRD tax liability is incurred at this stage.
- Purchase Order / Advance Deposit: Client accepts the quotation and deposits mobilization advance (e.g. 50% via Commercial Bank / Sampath Bank).
- Tax Invoice Issuance: Upon delivering goods or milestone completion, you generate the final Tax Invoice with sequential reference number to claim the remaining balance and record IRD output tax.
4. Sri Lankan Bank Settlement Details
To expedite direct bank deposits via CEFT / SLIPS / online banking, always clearly specify:
- Bank Name: e.g., Commercial Bank of Ceylon PLC, Sampath Bank PLC, Hatton National Bank (HNB), Bank of Ceylon (BOC)
- Branch Name & Code: e.g., Kollupitiya Branch (Code: 014)
- Beneficiary Account Name: Exact registered business account title
- Account Number: 10 to 12 digit domestic account format
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