Data points
- Controlled transactions that trigger a local file and the disclosure form[1]
- LKR 200m
- Declared group revenue that triggers a master file[1]
- EUR 50m
- To produce the master file and local file once the tax authority asks[1]
- 60 days
- Retention period, from the end of the year of assessment[1]
- 6 years
- Country-by-country notification deadline, in the reporting fiscal year[3]
- 31 December
- Consolidated group revenue that triggers country-by-country reporting[1]
- EUR 750m
- Within which the Dispute Resolution Panel must decide a disputed adjustment[4]
- 6 months
Sri Lanka keeps transfer pricing documentation rather than collecting it, then gives you 60 days to produce it once the tax authority asks. A group that has not prepared the file in advance cannot build one inside that window.
The four facts to know:
- A local file is owed once controlled transactions with associated enterprises pass LKR 200 million in a year of assessment, excluding dividends and loan capital.
- A master file is owed once declared group revenue passes EUR 50 million, or the rupee equivalent.
- Both are kept, not filed, produced within 60 calendar days of a written request, and retained for six years.
- There are no advance pricing agreements. A disputed adjustment goes to the Dispute Resolution Panel, which must decide within six months.
What transfer pricing documentation does Sri Lanka require?
A local file, a master file for larger groups, a disclosure form with the annual return, and a country-by-country report for the biggest groups of all. The regime took effect on 1 April 2020 and was gazetted on 2 March 2021 by the Inland Revenue Department[1], and it has been stable since.
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| Requirement | Trigger | When | Source |
|---|---|---|---|
| Local file | Aggregate controlled transactions above LKR 200 million in a year of assessment | Within 60 calendar days of a written request | Inland Revenue Department, Sri Lanka |
| Master file | Declared group revenue above EUR 50 million, from the 2020/2021 year of assessment | Within 60 calendar days of a written request | Inland Revenue Department, Sri Lanka |
| Transfer Pricing Disclosure Form | Aggregate controlled transactions above LKR 200 million | With the annual return of income | Inland Revenue Department, Sri Lanka |
| Country-by-country report | Consolidated group revenue of EUR 750 million or more | Within 12 months of the reporting fiscal year end | Inland Revenue Department, Sri Lanka |
| Retention | Documentation prepared | Six years from the end of the year of assessment | Inland Revenue Department, Sri Lanka |
The arm's length range is the interquartile range, and a result outside it is adjusted to the median. Benchmarking that lands your entity near an edge of the range is therefore worth refining before the file is signed off.
Who counts as an associated enterprise in Sri Lanka?
Two enterprises are associated where one holds the majority of the voting power in the other, directly or indirectly, or where any one person holds at least 50% of the voting power in each. The local subsidiary of a foreign parent is inside on that test alone.
The definition then extends well past ownership. Loans or guarantees above set shares of assets or borrowings count. So does the power to appoint the board, dependence on a single supplier or a single customer, and family control. A supply relationship with no shareholding at all can make two companies associated.
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Which form goes in with the annual return?
The Transfer Pricing Disclosure Form, wherever aggregate controlled transactions pass LKR 200 million. It is filed with the annual return of income and asks for the taxpayer identification number. The current published version of the form[2] is the one issued for the 2023/2024 year of assessment.
One thing the current regime does not have is an approved-accountant arm's length certificate. That auditor certification belonged to the previous tax act and went when the current one took effect, so compliance rests on the self-filed disclosure form and the documentation behind it.
What are Sri Lanka's country-by-country reporting rules?
Reporting applies to groups with consolidated revenue of EUR 750 million or more, or the rupee equivalent, in the preceding fiscal year. The report is due within 12 months of the reporting fiscal year end. The notification runs on a calendar date instead, which is easy to miss.
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| Obligation | Detail | Source |
|---|---|---|
| Applicability | Consolidated group revenue of EUR 750 million or more in the preceding fiscal year | Inland Revenue Department, Sri Lanka |
| Notification deadline | No later than 31 December of the reporting fiscal year | Inland Revenue Department, Sri Lanka[3] |
| Report deadline | Within 12 months of the reporting fiscal year end | Inland Revenue Department, Sri Lanka |
| Effective from | Reporting fiscal years beginning on or after 1 April 2020 | Inland Revenue Department, Sri Lanka |
The notification is filed on Form TP/CbCR/01 and states whether the Sri Lankan entity is the ultimate parent, the surrogate parent, or neither. Where it is neither, it names the entity that actually reports.
When are Sri Lanka's transfer pricing deadlines?
One of the four dates is fixed in advance. The disclosure form goes in with the annual return, the notification is due by 31 December, and the two files are due only when asked for, within 60 calendar days.
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| Obligation | Deadline | Source |
|---|---|---|
| Transfer Pricing Disclosure Form | With the annual return of income | Inland Revenue Department, Sri Lanka |
| Master file and local file | Within 60 calendar days of a written request | Inland Revenue Department, Sri Lanka |
| Country-by-country notification | By 31 December of the reporting fiscal year | Inland Revenue Department, Sri Lanka |
| Country-by-country report | Within 12 months of the reporting fiscal year end | Inland Revenue Department, Sri Lanka |
What language and currency does the documentation use?
English, for both files. That removes a translation cost most foreign parents carry elsewhere. Currency presentation is not confirmed, so this page does not assert a rule. The thresholds themselves are fixed in rupees for the local file and in euros for the master file.
What are the penalties for missing Sri Lanka transfer pricing documentation?
Failing to prepare, maintain or produce the documentation is penalised, and the OECD transfer pricing country profile for Sri Lanka[4], updated June 2022, confirms the hook without stating an amount. The amount is not confirmed from a primary source, so this page does not quote one.
Recheck the quantum against the latest amendments to the tax act before you rely on a figure from anywhere else. The practical exposure sits elsewhere in any case: an arm's length adjustment at the Sri Lankan entity, and a 60-day scramble for files the group never prepared.
How are disputes resolved in Sri Lanka?
Through the Dispute Resolution Panel, which must decide a disputed adjustment within six months. Rulings and the mutual agreement procedure are also available. Advance pricing agreements are not offered at all, so there is no way to fix a method with the tax authority before the fact.
The assessment window is not confirmed from a primary source, so this page does not state a fixed period. Hold the six-year retention rule as your working floor rather than assuming a shorter one.
How does Sri Lanka differ from the OECD baseline?
Sri Lanka is not an OECD member, but it joined the Inclusive Framework on base erosion and profit shifting[5] and follows the guidelines with local differences. The three-tier structure itself is straight from the OECD model.
- The local file trigger is LKR 200 million and the master file trigger is EUR 50 million, both set domestically rather than copied from a standard.
- A disclosure form is filed with the annual return, which most OECD peers do not require.
- No advance pricing agreement programme exists.
- No safe harbours had been issued as of the 2022 profile, although the legislation allows them.
- A result outside the interquartile range is adjusted to the median.
How we help with Sri Lanka transfer pricing
Sixty days is enough to hand a file over and not enough to write one, so the work has to be done before the request arrives. We prepare the master file and the local file in English, structure the local file by transaction type so software services, cost-plus services and recharges each carry their own benchmarking conclusion, and keep the disclosure form consistent with what the file says. See how our transfer pricing software works.
Book a demo to get a Sri Lanka documentation exposure review before the next request lands.
Official sources
5 sources
- 1.Inland Revenue Department, Sri Lanka. Regulations on transfer pricing, Extraordinary Gazette (2 March 2021)
- 2.Inland Revenue Department, Sri Lanka. Transfer Pricing Disclosure Form, year of assessment 2023/2024
- 3.Inland Revenue Department, Sri Lanka. Form TP/CbCR/01, country-by-country reporting notification
- 4.OECD. Transfer pricing country profile: Sri Lanka (June 2022)
- 5.OECD. OECD/G20 Inclusive Framework on BEPS, composition
Article by
Sam Suechting
Head of Product, Commenda
Sam is a seasoned expert in sales tax, leading Commenda's effort to build the worlds most comprehensive database of global tax rules and business regulations. At Silverhaze Partners, he worked in early-stage venture capital, where he saw firsthand how tax complexity and regulatory friction hold back startups from scaling internationally. That experience now powers his work at Commenda-bringing clarity, precision, and real-world insight to one of the most frustrating parts of doing business globally.
Disclaimer: Commenda and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
