Budget 2027: Crypto Capital Gains Tax in Sri Lanka

TL;DR

Budget 2027, presented on 12 November 2026, proposes to bring "digital and virtual assets, including cryptocurrencies" under Capital Gains Tax. The default start date is 1 April 2027. It is a proposal, not yet law. The papers give no tax rate and no rules for working out your cost. Parliament was also told on 9 July 2026 that the tax office will treat crypto profits as "other income". If you hold or trade crypto in Sri Lanka, start keeping dated records of every buy, sell and swap now.

Not tax or legal advice. This article sets out what public documents say. Ask a Sri Lankan accountant or lawyer about your own case.

What did Budget 2027 say about crypto?

President Anura Kumara Dissanayake presented the Budget 2027 speech in Parliament on 12 November 2026, as Minister of Finance (Budget Speech 2027↗). Two items touch crypto. That is all.

1. A promise of rules for crypto businesses. The speech lists this aim: "preparing the necessary regulatory basis for Virtual Asset Service Providers (VASP)". It adds "through the establishment of a formal legal framework". A VASP is a business that handles crypto for other people. The speech gives no date for this.
2. A tax proposal. The Technical Notes, Annexure V, item 1.3, propose changing the meaning of "capital asset" in section 195 of the Inland Revenue Act. The first new item on the list is "Digital and virtual assets, including cryptocurrencies".

A search of the English speech finds no mention of blockchain, tokens, stablecoins or crypto mining. Beyond the two items above, the Budget says nothing about crypto, including USDT, staking or mining.

For what the VASP promise could mean, see the FATF review article.

What is Capital Gains Tax in simple words?

Capital Gains Tax (CGT) is a tax on the profit when you sell an asset for more than it cost you.

Here is an example. It is not a tax rate, and not advice. Say Amal bought 100 USDT for Rs. 30,000 and later sold it for Rs. 33,000. The gain is Rs. 3,000, which is the sale price minus the cost. CGT is charged on a gain like that. The rate and the way to measure the cost are the parts the Budget has not given.

Sri Lanka already charges CGT on some assets. Section 195 of the Inland Revenue Act No. 24 of 2017 defines a "capital asset" (Inland Revenue Act, consolidated text↗). Its list starts with "(i) land or buildings; (ii) a membership interest in a company, partnership or trust; (iii) a security or other financial asset". It does not name virtual assets. That is why the Budget proposes adding them.

The Inland Revenue (Amendment) Act No. 11 of 2026 was certified on 3 June 2026 (Act No. 11 of 2026↗). It changed section 195 but did not add virtual assets.

When would it start?

The Technical Notes say: "Unless specifically mentioned otherwise in this Technical Note or the relevant Tax Legislation, amendments proposed herein before will be effective from April 1, 2027." The crypto item gives no other date. So the default is 1 April 2027.

Two warnings.

• A Budget proposal is not law. Parliament must pass an amending law first. At the time of writing, that law has not been tabled.
• The default can change. The final law may set a different date.

What is still missing from the proposal?

This is the most useful part. The Budget Technical Notes do not state:

• A CGT rate for crypto.
• Rules for working out your cost, which is called the cost basis.

I also found no text on:

• What happens when you swap one coin for another.
• Whether USDT is treated differently from other coins.
• Mining or staking income.
• How a loss is treated.
• Which date and which exchange rate to use to turn a coin value into rupees.

Do not trust anyone who gives you a CGT percentage for crypto today. The government has not published one. Any number you see online now is a guess.

What did the government say about crypto tax before the Budget?

On 9 July 2026, the government answered a question in Parliament. It said "any profits arising from cryptocurrency or related activities will be recognized by the Inland Revenue Department as other income" (Hansard, 9 July 2026↗). It also said information on the rate and method was not yet available.

That is a ministerial answer. I found no circular, practice note or FAQ on crypto tax from the Inland Revenue Department (IRD). A site search cannot prove that none exists, though.

So there are two ideas on the table: crypto profit as "other income", and a proposed CGT. Nobody has said how they fit together. This is one of the things nobody has decided.

KPMG Sri Lanka's head of tax spoke about this in November 2025 (Daily Mirror, 21 November 2025↗). He said taxes "are being imposed but the revenue is not being collected. One such area is cryptocurrency." He also said the Inland Revenue Act needs amending. That is one expert's view, not a rule.

Do I already have to declare crypto?

There is one hard instruction. The IRD's individual return guide for the 2025/26 year of assessment tells filers to declare assets in the Statement of Assets and Liabilities (IRD guide↗). Its list includes gold, jewellery, collectibles "and virtual assets acquired or gift received by you as at 31.03.2026". The same guide says the return must be filed on or before 30 November 2026.

Read this carefully. It is about listing assets you held on 31 March 2026. It does not say what tax you owe. I cannot tell you how it applies to your case. Ask an accountant or the IRD.

What records should I keep now?

Whatever the final rules say, they will need facts about each trade. Records you can build now cannot hurt. This is my advice, not a rule.

Keep a sheet or notebook with one row per event:

1. Date and time of each buy, sell, swap, transfer or payment.
2. Asset and amount. For example, 100 USDT.
3. Rupee value at that moment. What you paid or received in rupees. For a swap between coins, note the rupee value on the day.
4. Fees. Exchange fees, network fees and any spread, which is the gap between the buy and sell price.
5. Where it happened. The exchange or wallet, the order number, the network.
6. Who the other side was. For a P2P trade, the counterparty name and the bank account used.
7. Bank statements. The transfer that matches each trade.
8. Your holdings on 31 March each year. Take a screenshot or export of every balance. The IRD guide for 2025/26 asks for values as at 31 March 2026.
9. Crypto you received as income or as a gift. A freelancer paid in USDT should log the date and the rupee value when it arrived. See Sri Lankan freelancers: cash out USDT or PayPal.
10. Exports from the exchange. Download your full trade history now. Do not rely on the exchange to keep it for you.

Keep the files for years, in two places.

If you do P2P trades, your bank statements and chat logs are part of the record. See how P2P trades and frozen accounts work.

Does this mean crypto is allowed in Sri Lanka?

Not by itself. A tax proposal does not settle the legal question. Governments can tax things they have not approved. See is it legal to sell USDT in Sri Lanka for the sources, and the full regulation guide for the wider picture. In short, CBSL said in 2023 that crypto is unregulated, and no licensing law exists yet.

Quick answers

Will crypto be taxed in Sri Lanka from April 2027?

It is proposed, not decided. The Budget 2027 Technical Notes propose adding digital and virtual assets, including cryptocurrencies, to Capital Gains Tax. The default start is 1 April 2027, and the law must pass first.

What is the crypto capital gains tax rate in Sri Lanka?

No rate has been published. The Technical Notes give none. Any rate you see quoted is a guess.

Do I pay tax on crypto I already hold?

I found no rule on that. The proposal is about gains, and it would start in the future by default. The IRD return guide does ask filers to declare virtual assets held on 31 March 2026.

Is crypto income already taxed as other income?

The government told Parliament on 9 July 2026 that crypto profits will be recognised by the IRD as "other income". I found no IRD guidance that sets out how.

What should I do before April 2027?

Keep complete records and export your trade history. Talk to an accountant if your trading is large or regular.

What I could not verify

• The CGT rate and cost-basis method for crypto. Neither is published.
• How crypto-to-crypto swaps, mining and staking will be taxed.
• Whether a draft amending law exists. I found none.
• Any IRD circular or FAQ on crypto tax.
• How the "other income" statement and the CGT proposal will fit together.

Key Takeaways

• Budget 2027 proposes Capital Gains Tax on digital and virtual assets, including cryptocurrencies. It is a proposal, not law.
• The default start date is 1 April 2027. The crypto item gives no other date.
• No rate and no cost-basis rules are published. Ignore any number you are told.
• The government told Parliament on 9 July 2026 that crypto profits will be treated as "other income".
• The IRD return guide already asks you to declare virtual assets held on 31 March 2026.
• Start dated records now: every buy, sell, swap, fee and bank transfer, with the rupee value at the time.

About the Author

I'm Uvin Vindula — a Web3 and AI engineer based between Sri Lanka and the UK, founder of uvin.lk↗, Sri Lanka's Bitcoin education platform, and author of The Rise of Bitcoin. I write plain-English guides so Sri Lankans can use crypto without getting burned. This is education, not financial advice. See my work at iamuvin.com or reach me at [email protected]↗.