VAT Calculator Sri Lanka — 18% Standard Rate (Add / Strip)

Sri Lanka's VAT Rate: 18% Since January 2024

Sri Lanka applies a standard VAT rate of 18%, increased from 15% effective January 1, 2024. This recent change means invoices and older calculators may reflect outdated figures. At 18%, calculating backwards incorrectly can cost significant money per invoice.

How to Calculate VAT: Forward and Reverse

The calculator handles both directions:

• Adding VAT: Net × 1.18 = Gross (VAT-inclusive price)
• Extracting VAT: Gross ÷ 1.18 = Net
• VAT amount: Gross − Net = VAT

Why the Reverse Calculation Matters at 18%

Stripping VAT from a VAT-inclusive price is where most errors occur. Many people incorrectly subtract 18% instead of dividing by 1.18. On LKR 11,800, the correct method gives LKR 10,000 net (11,800 ÷ 1.18). The wrong method gives LKR 9,676, an error of LKR 324 on a single invoice. At 18%, this gap is far wider than at lower rates, making accuracy critical for accounting.

What This Calculator Does (and Doesn't)

This calculator performs arithmetic for both VAT directions. It does not determine if a supply is standard-rated, zero-rated, or exempt; it does not handle SVAT or imports. Consult the Inland Revenue Department or a tax adviser on classification. Confirm rates and thresholds with your tax authority, as they change.

See also: Income Tax Calculator Sri Lanka and Salary Calculator Sri Lanka.