VAT in Oman


VAT in OMAN

Oman plans to implement a 5% VAT from 1 April 2021. This is based on a Royal Decree (No 121/2020) approved by Sultan Haitham Bin Tariq Al Said. It should be gazetted by 18 October 2020.

What is VAT?
VAT is a consumption-based Indirect Tax that is levied on each stage of the supply chain.
VAT is not an ultimate cost for businesses, in general terms. Businesses will collect and account for the tax on the supplies they make; businesses will also pay VAT on the purchases they make. VAT adopts an offsetting mechanism such that the amount of VAT to be remitted to the TA is the difference between the output tax (VAT charged and collected on sales) and the input tax paid (VAT paid on purchases).

Final consumers will ultimately bear the cost of VAT. The VAT is imposed on a taxable person; this is a person (an individual, company, joint venture, or partnership) who is registered for VAT (or required to), in accordance with the Agreement

The mandatory VAT registration threshold is OMR 38,500. However, it is possible to apply for a voluntary registration above OMR 19,250. Non-resident businesses will be required to VAT register if they provide taxable supplies.

These supplies will be exempted including:

  • Basic foodstuffs
  • Rent
  • Healthcare
  • Public education
  • Public transport
  • Sale of real estate
  • Sale of greenfield land sites
  • Import of medical equipment, certain precious metals, certain transport equipment
  • Crude oil imports

FAQ:

Q: How can we register for VAT in Oman?

A: You can register for VAT online.

Q: What are the minimum requirements for the VAT registration in Oman?

A: The turnover should be more than 38,500 OMR per year.

Q: What is the voluntary registration in Oman?

A: The turnover should be equal to or above 19, 250 OMR.

Q: What is the mandatory registration in Oman?

A: The turnover should be above 38,500 OMR.

Q: What is the minimum turnover for voluntary registration in Oman?

A: 19,250 OMR

Q: What is the minimum turnover for mandatory registration in Oman?

A: 38,500 OMR

Q: How can we register for VAT online?

A: The online registration link will be updated soon.

Q: How VAT is going to impact me?

A:  It varies from entity to entity. However, in general, depends if you are doing business in a free zone, industrial area of the mainland and what are the supplies, whether it’s zero-rated, exempted, or taxable.

Q: What are exempt supplies in Oman?

A: Below are the supplies will be exempted:

  • Basic foodstuffs
  • Rent
  • Healthcare
  • Public education
  • Public transport
  • Sale of real estate
  • Sale of greenfield land sites
  • Import of medical equipment, certain precious metals, certain transport equipment
  • Crude oil imports

Q: What are zero-rated supplies in Oman?

A: Below are zero-rated supplies.

  • Export of goods
  • Export of services
  • Certain financial services
  • Certain educational services

 

 

Note: All above only for information purpose and RAS is not liable for any decision taken based on the above information with getting separate confirmation in writing from RAS, as the implications of VAT is different for different companies and for different supplies.

 

 

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