Tax Disambiguation

Many of you have probably gone to a restaurant and been bewildered by the amount that the bill varies from what is on the menu.

Here are the tax categories of restaurant that you will come across in Sri Lanka.

Updated on 01 November 2016 for the new VAT.

Category 1 - Nett

Fast food or "quick service" restaurants and patisseries, and certain beach resorts whose clients are used to nett prices - where, what you see is what you pay. This is applied by law in EU/Eurozone countries (except for an enforced "tip"), New Zealand, Australia and Japan. What most people want! - No calculation required, no surprises !

Category 2 - Service Charge only

Single Plus (+). Small restaurants whose turnover does not make them liable to VAT or NBT , come into this category. Service charge is usually 10%.
To calculate your total cost, multiply by:
1.1

Category 3a - Value Added Tax (VAT)

Double plus (++). No service charge. You are expected to leave a tip instead. This is rare. VAT 15%.
Calculation : (1.15).
To calculate your total cost, multiply by:
1.15

Category 3b - Value Added Tax (VAT) and Nation Building Tax (NBT)

Double plus (++). No service charge.You are expected to leave a tip instead. Very rare. The restaurant is not registered with the SLTDA (not eligible for TDL), but has a large enough turnover to be required to pay NBT. Usually a large Fastfood/Takeaway/Delivery/Catering-type operation. VAT 15% and Nation Building Tax 2% thereon (cascading), totalling .
Calculation: (1.15 x 1.0204)
To calculate your total cost, multiply by:
1.17346

Category 3c - Service Charge and Nation Building Tax (NBT)

Double plus (++). The restaurant is not registered with the SLTDA, but has a large enough turnover to be required to pay NBT. Service charge 10% and Nation Building Tax 2% thereon (grossed up and cascading), totalling 12.04%
Calculation: 1 + (0.1+2/98)
To calculate your total cost, multiply by:
1.1416

Category  4 - Service Charge, VAT, NBT
The Most Common
Triple plus (++++) or "Service Charge and Government Taxes". This is the most common. Service charge 10%, VAT 15% thereon, then add Nation Building Tax (NBT) 2%, totalling . 
Calculation : (1.1 x  1.15 x 1.01) +  1.1 x 1.15 x 0.02]
To calculate your total cost, multiply by:
1.3028


Category 6 - Nation Building Tax only

Beach resorts who had nett prices before 01 January 2011, are now required to pay 2% NBT.
To calculate your total cost, multiply by:
1.02
 
If a discount has been offered, before applying the multiple given, use
(1-discount percentage) first.
e.g. for 15% discount (1-0.15) = 0.85

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