Where the exemption does apply, its two limbs are unchanged in substance. The employment income of a resident employee is exempt and deemed a permissible credit to that employee's personal foreign currency account. The employment income of a non-resident employee is exempt, and notwithstanding any contrary written law, that employee is not liable to Sri Lankan income tax on income earned outside Sri Lanka — section 35(2)(a) and (b).
The commencement date of the replaced section 35 governs both the eligibility cut-off and the running of the three-year period. The Amendment Act carries no commencement clause, so under Article 80(1) of the Constitution it became law on certification, 20 January 2026. The cut-off is therefore whether the employer held its registration, licence, authorisation or approval before that date, and the three-year period runs from February 2026. The date of the specific employer's licence should be checked against its own documents before any position is taken.
