Compliance
Sri Lanka: Compliance Guide for Social Security Contribution Levy (SSCL) Changes
Sri Lanka has reduced SSCL registration thresholds and made motor vehicles subject to SSCL at import but exempted wholesale/retail sales — here’s how businesses can adapt.
By NomadicTax Research Team • 5 min read • September 9, 2026
## Overview of the SSCL Amendments (Effective July 1, 2026)
- The **registration threshold** for SSCL has been **reduced**: now **Rs. 9 million per quarter** (was Rs. 15 million), or **Rs. 36 million over four consecutive quarters** (was Rs. 60 million). ([ird.gov.lk](https://www.ird.gov.lk/en/Lists/Latest%20News%20%20Notices/Attachments/780/PN_SSCL_2026-04_1_E.pdf?utm_source=openai))
- **Import exemption** for motor vehicles has been **terminated**. Now **all vehicle imports** are subject to SSCL from **May 1, 2026**. However, **wholesale and retail sale of motor vehicles** is **exempted** under Part IB from that same date. ([ird.gov.lk](https://www.ird.gov.lk/en/Lists/Latest%20News%20%20Notices/Attachments/780/PN_SSCL_2026-04_1_E.pdf?utm_source=openai))
## Compliance Implications for Businesses
- Businesses previously not required to register may now cross thresholds and must register and file SSCL returns. Non-registration or late registration can result in penalties.
- Importers of vehicles will need to calculate SSCL at point of import, altering cost base and pricing.
- Retailers might benefit from exemption in wholesale/retail arms, but must ensure wholesale or retail license and appropriate schedule applies.
## Actionable Steps for Affected Taxpayers
1. **Monitor turnover closely**
• Track quarterly and rolling four-quarter turnover to see if registration is triggered.
• Turnover projections help avoid surprise liabilities.
2. **Adjust costing and pricing**
• For importers: recalculate landed cost including SSCL charge.
• Pass through costs (if possible) in pricing.
3. **Ensure correct classification**
• Wholesale or retail sale exemption applies only under specific legal schedule (Part IB). Review whether your operations fall under that classification.
4. **File required returns & keep records**
• Registered persons must file SSCL returns timely.
• Document import declarations, invoices, proof of business classification.
## Example
> ABC Motors Ltd: imported vehicles to Sri Lanka with annual imports value of Rs. 100 million. Under old threshold, not SSCL registered. Now as imports alone, SSCL is due at import; wholesale branch exempt, but retail sales must consider whether applicable.
- They must register, pay SSCL on imports and document wholesale/retail segregation. Pricing adjusted accordingly.
**Summary**: The 2026 SSCL changes significantly expand coverage and liabilities. Monitoring turnover, registering timely, and ensuring correct schedules/exemptions are applied are crucial to avoid penalties.