Oman’s tax authority has received its first digital VAT returns, since implementing VAT earlier this year. Oman introduced VAT on 16 April 2021.
“The Tax Authority stresses the importance of submitting VAT returns on time to avoid penalties stipulated in the VAT Law and Executive Regulations,” Oman’s tax agency said in a release to the public. Failure to pay Omani VAT on time is punishable by a fine, or even imprisonment.
In addition, companies that are registered for VAT in Oman are obliged to keep regular accounting records. They must also retain relevant invoices, customs documents and other supporting documentation.
Who has to register for Oman VAT?
Oman is implementing VAT in a phased rollout.
Only companies that met the specified threshold were obliged to file VAT returns as of 1 July. However, some companies with a lower threshold are eligible to voluntarily register for VAT.
If your business operates in Oman, you should therefore get in touch with a VAT expert for full clarity on your exact VAT obligations.
Special conditions for nonresident companies
Note that the threshold does not apply to nonresident businesses. All nonresident businesses that do business in Oman must register for VAT.
In addition, nonresident have a special obligation to appoint a ‘responsible person’. The responsible person, who must be resident in Oman, acts on the company’s behalf.
What does VAT cover in Oman?
Oman’s new VAT rate is 5%. VAT applies to all goods and services, except items designated as exempt from VAT. Exempt items include medicines and certain foods, as well as essential services, such as healthcare.
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