VAT Registration in Oman-Who should Register for Vat in Oman?

VAT Registration in Oman

VAT Registration in OMAN is expected to begin from January 2021. VAT Registration in Oman is mandatory for companies with an annual turnover above 38,500 OMR. It is also allowed for companies with an annual turnover above OMR 19,250 to do voluntary Tax Registration in OMAN.

Whenever a new law is implemented, what comes to every entrepreneur's mind is, ‘Will this affect my business too’? In this article, we will discuss what is a taxable supply, who all are required to register under the new Oman VAT law, when it is applicable to a business entity (VAT Registration Threshold in Oman: Mandatory and Voluntary) and what all goods and services are covered under this act.

Who Should Register for VAT in Oman?

Next question that pops up is whether VAT Registration in Oman is applicable to our business or not. This section deals with the threshold limit when a taxable person should apply for VAT Registration in Oman or not. Every business having taxable supply crossing OMR 38,500/- should mandatorily apply for VAT Registration in Oman.

If a non-resident is conducting a business in Oman, then he must also apply for registration irrespective of turnover limit by appointing a Tax Representative. The Oman VAT Law has specified mandatory threshold and voluntary threshold limits for VAT Registration procedure in Oman. While calculating the value of supplies the business must consider standard rated, zero-rated sales and business imports.

What is the Mandatory Threshold for VAT in Oman?

The mandatory threshold for VAT in Oman as mentioned above is OMR 38,500/-. If the value of supply at the end of the current month or expected to be made at the end of the month along with preceding 11 months crosses OMR 38,500/- they must apply for VAT Registration in Oman. 

What is the Voluntary Threshold for VAT in Oman?

Voluntary Registration in Oman gives businesses an opportunity to register for VAT in advance. If the expected supply or expense incurred at the end of any month in addition to the eleven months immediately preceding it is above OMR 19,250/- one can apply for voluntary VAT registration.

VAT Registration in Oman – Who is Eligible? 

If a business activity includes standard-rated and zero-rated supplies, they should register for VAT in Oman as per the threshold guidelines. 

The standard VAT rate is 5% which is in consistence with the GCC VAT agreement. Supply of all goods and services will be taxable at the standard rate of 5%, except those specifically mentioned under zero-rated and exempt category.

The main difference between zero-rating and exempt is zero-rating allows the taxable person to claim any VAT expense incurred by them during the business. One can expect upon request, a taxable person who has only zero-rated supplies would be excluded from mandatory registration.

Zero Rated Supply 
  • Export goods and services as well as the re-export of temporarily imported goods
  • Supply of Goods or services to a customs duty suspension situation, as provided for in the Common Customs Law
  • Certain food items that will be listed in future
  • Certain medicines and medical equipment
  • Investment gold, silver and platinum
  • International transport and intra-GCC transport of Goods and passengers, and the supply of related services.
  • Supply of aircraft or vessels designated for rescue and assistance by air or sea
  • Crude oil, oil derivatives and natural gas
  • Supply of air, sea and land means of transport for the transportation of passengers and goods for commercial purposes and related services; and the
  • Supply of Services by a Taxable Supplier residing in the Sultanate to a Customer who does not reside in the GCC countries, on the condition that the customer benefits from the services outside the GCC countries, except for the cases provided.
The supply in the above goods or services will be taxed at zero percent. 
Exempt Categories 
  • Financial services.
  • Supply of prevention and health care and associated Goods and services.
  • Supply of education and associated Goods and services.
  • Undeveloped lands (bare lands).
  • The resale of residential real estate.
  • Local passenger transport.
  • Renting real estate for residential purposes.
  • The Oman VAT Law also specifies certain imported goods that will be exempt from VAT such as returned goods, personal luggage, etc

Furthermore, article 48 also lists out certain imported goods that would be considered as exempted such as returned goods, supplies of non-profit associations, etc. These would be subject to conditions and controls stipulated in the Common Customs Law.

What are the Documents Required for VAT Registration in Oman?
  • Certificate of registration 
  • Memorandum of Association 
  • Turnover declaration
  • Bank details
  • Details of Responsible person and such other documents requested from time to time.
Penalties Associated with VAT Registration in Oman

Purposefully refraining from VAT Registration is a punishable offence resulting in imprisonment for a period of 1 to 3 years and fine up to OMR 20,000/-. To avoid penalty every unregistered person engaged in economic activity has to keep a track of taxable turnover to check if they have crossed the registration threshold.

Every taxable person in Oman must be prepared to comply with the Oman VAT law and ensure regulations are timely adhered to. 

The Benefit of Registering for VAT in Oman

The major benefit one can get by applying for VAT Registration in Oman is the availability for claiming input VAT, which means VAT paid on any business expense can be claimed/reversed from the output VAT collected from customers and only the net VAT needs to be paid to the government.

How Can We Support You with VAT Registration in Oman?

A team of experts is just a click away to resolve all your confusions, answer all your queries and register your business for VAT in Oman. With our abundant experience in implementing VAT across a wide array of clientele in UAE, Bahrain and KSA, we can support you in developing a sustainable tax system in compliance with the regulations.

Our services include:
•    VAT Registration Service in Oman
•    VAT Implementation Service in Oma

For  VAT Registration in Oman

CA. Manu Palerichal I Partner & CEO
Mob: +971 50 2828727

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