VAT TO BE IMPLEMENTED FROM APRIL 2021 IN OMAN

Introduction

The Sultan of Oman named Sultan Haitham bin Tariq bin Taimur has issued a Royal Decree 121/2020 on 12th October 2020 concerning the introduction of Value Added Tax (VAT) in Oman.
This is in relation with following the introduction of VAT in the UAE, the KSA and Bahrain, Oman will be the 4^th GCC country to implement VAT in the region. The Oman Tax Authority has begun to supply information through its social media platforms, including the following categories will not be subjected to VAT at the standard rate of 5% respectively: -

1. Basic food commodities.
2. Education services and associated goods and services.
3. Medical care services and associated goods & services.
4. Supplies for charities.
5. Requirements for people with disabilities.
6. Financial services.
7. Resale of residential properties.
8. Undeveloped lands (vacant lands).
9. Passenger transport services.
10. Supply of investment gold, silver and platinum.
11. Renting out real estate for residential purposes.
12. Supply of medicines and medical equipment.
13. Supply of crude oil, petroleum derivatives & natural gas.
14. Supply of rescue and aid aircraft & vessels.
15. Supplies of international transport and interchange of goods or passenger and the supply of associated services. The supply of marine, air and land transportation means intended for the transportation of goods and passengers for commercial purpose and the supply of goods and services associated with transport.

Process for Registration

The process for registration for VAT Law may initiate from January 2021. It is pertinent to note that businesses having a turnover of less than US$50K or OMR 18,500 can’t apply for registration. Hence, they are not obliged to pay VAT. A non-resident taxable person is required to have compulsory registrations irrespective of the turnover.



Penalty Proceedings

It is expected that every Tax Authority shall furnish VAT returns within 30 days from the end of each tax period along with the payment of such tax. Otherwise, Penalty will be charged within range of OMR5,000 to OMR 20,000 or imprisonment of up to 3 years for deliberately violating to comply with registration or return requirements. Other violations may result in fines of OMR 1,000 to OMR 10,000 or imprisonment of up to 1 year.

In conclusion, Oman is set to introduce Value Added Tax (VAT) from April 2021, becoming the fourth GCC country to implement VAT. The registration process will begin in January 2021, and penalties will be imposed for non-compliance with registration and return requirements.

Get prepared for the implementation of Value Added Tax (VAT) in Oman. Stay informed about the registration process, exempted categories, and avoid penalties by ensuring compliance with VAT laws. For Assistance, feel free to connect with us at info@manishanilgupta.com

Disclaimer: This content is purely for knowledge and educational purposes. It contains only general information and references to legal content. It is not legal advice, and should not be treated as such