The Inland Revenue Department (IRD) has assured Sri Lankan expatriate workers that they need not fear taxation when sending legally earned foreign income to Sri Lanka through the formal banking system.
Senior Deputy Commissioner of the IRD, Hiran Meneripitiya, said tax liability on foreign income depends primarily on an individual’s tax residency status in Sri Lanka for the relevant assessment year.
According to Meneripitiya, individuals who qualify as tax residents in Sri Lanka may be liable for tax on both their foreign and local income. However, those who do not qualify as resident taxpayers for the relevant assessment year are generally not liable to Sri Lankan income tax on income earned outside the country.
He also stressed that expatriate workers should not be concerned that banks will automatically impose or deduct a separate tax simply because foreign earnings are remitted to Sri Lanka through official channels.
The IRD further emphasized that migrant workers have the right to transfer their legally earned foreign income through the formal banking system and use those funds for legitimate investments and other lawful purposes in Sri Lanka.
Authorities warned that unfounded fears over taxation should not encourage expatriate workers to resort to informal or illegal money-transfer channels.
The department said the formal banking network provides a secure and transparent mechanism for Sri Lankans working overseas to remit their earnings and contribute to the domestic economy.
