Sri Lankan migrant workers have no reason to fear taxation when remitting their legally earned overseas income through the formal banking system, the Inland Revenue Department (IRD) has asserted.
Senior Deputy Commissioner of the IRD Hiran Meneripitiya made the statement while speaking on the Ada Derana “BIG FOCUS” programme.
He said an individual is considered a tax resident of Sri Lanka if they meet the relevant criteria for tax purposes, and such individuals may be liable to tax on both income earned in Sri Lanka and income earned overseas.
However, Meneripitiya explained that if a person is not a tax resident of Sri Lanka for the relevant year of assessment, income earned outside Sri Lanka would not be subject to Sri Lankan income tax.
He therefore stressed that migrant workers should not develop an unnecessary fear of taxation when sending their overseas earnings to Sri Lanka through the banking system.
“There is no tax charged through the banking system simply because money is being remitted to Sri Lanka,” he said.
Meneripitiya also noted that migrant workers have the opportunity to bring their legally earned foreign income into Sri Lanka through formal channels and legally invest those funds within the country.
He urged overseas Sri Lankan workers to use the formal banking system for remittances rather than turning to informal or illegal channels due to concerns about taxation.
The IRD Senior Deputy Commissioner emphasized that the tax residency status of the individual for the relevant year of assessment is the key factor in determining whether their overseas income is subject to Sri Lankan tax.
