The Value Added Tax (VAT) law in Oman was published in the official gazette on 18th October 2020 after the release of Royal Decree 121/202. Oman will be the fourth GCC state to implement VAT since the signing of the GCC VAT Agreement at the end of 2016. The date of implementation of VAT in Oman is within 180 days from the date of publication of the Law in the Official Gazette, i.e., 16 April 2021. The law provides for a standard rate of VAT of 5%, with certain supplies being zero-rated or exempt from VAT.
Compared to the VAT law of other GCC nations, VAT in Oman has adopted different or additional treatments to certain concepts. One such concept is the Responsible Person. This article would discuss the term Responsible person, their duties, powers, responsibilities and penalties for noncompliance.
The Oman VAT law states that it is mandatory to appoint a responsible person for VAT in Oman. There must be a responsible person assigned by every taxable person. A Responsible Person is a person assigned with acting on his behalf in executing the responsibilities imposed upon him by virtue of the provisions of this Law. The Oman VAT law has defined who would be a responsible person in different types of entities under Article 2.
In cases of imposing receivership, liquidation or declaration of bankruptcy of the company: The receiver, liquidator or Director of bankruptcy, depending on the circumstances is the Responsible Person.
Article (3) of the Oman VAT law has explained the right of every taxable person to appoint the Responsible Person. It is the duty of every taxable person to identify and appoint a person as the responsible person and it should also be notified to the Tax authority in accordance with the procedure determined by the law.
It is also stated that if the Taxable Person fails to appoint a responsible person, the tax authority may do so on the taxpayers' behalf and the same is notified by the tax authority.
Unlike other effective VAT laws in other GCC nations, the period of absence of a responsible person for VAT in Oman is a new concept implemented under the Oman VAT law.
As per the Article 4 of the Oman VAT law, the responsible person must not remain outside the Sultanate for a period of more than (90) days during the tax year (i.e., calendar year). This could be done only with the permission of the tax authority.
The taxable person must obtain prior approval of the tax authority to appoint another responsible person to replace him during the period of his absence in case the responsible person has to stay outside the Sultanate for more than 90 days.
VAT in Oman has stated the duties of the responsible person in Article 76. One of the main responsibilities is during the event of an audit, the tax authority may request the physical presence of the responsible person within a given timeline. Hence, it is the responsibility of the responsible person to be present at the time and place stated in the competent notification to discuss taxable transactions or supplies, or anything in relation to the tax due, in accordance with this Law.
The duties of the responsible person also include submission of the tax return for every tax period without delay. Default in timely submission may attract penalty to the responsible person which is discussed later in this article.
Article 100 of the Oman VAT law has listed out penalties for non-compliance, which would include both with fine and imprisonment. The following instances would attract the penalty with imprisonment for a period of not less than (2) two months and not exceeding (1) one year or with a fine of not less than (1,000) one thousand Omani Rials and not exceeding (10,000) ten thousand Omani Rials, or either one.
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