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Oman implementing new VAT laws

Oman’s VAT laws come into effect on 16 April 2021. 5% VAT will apply on goods and services traded in Oman. The 5% rate also applies to goods that are imported into the Sultanate.

VAT in Oman will apply to all goods, except exempt essential items (such as medicines and specified food products) and exempt services (including healthcare and education). 

Nonresident companies that operate in Oman should take careful not of their obligations. 

Registering for VAT in Oman

Oman is employing a phased approach to VAT registration. Companies that generate revenue in excess of 1 million OMR had to register for VAT already. Such businesses are deemed registered from 16 April 2021. From that date, they must therefore comply with all relevant VAT requirements. 

Future phases require companies generating lower revenues to register for VAT.

Record keeping and VAT

Oman’s tax regulations state that relevant companies must maintain regular up-to-date accounting records. Businesses must also retain tax invoices, customs documents and other specified documentation. 

No threshold for nonresident companies

Note that there is no threshold for nonresident businesses that operate in Oman. Any nonresident business must register for VAT. 

Nonresident companies must also appoint a ‘responsible person’ to act on behalf of the company. The responsible person must be resident in Oman. Businesses operating from abroad, with no resident personnel, should therefore seek advice on how to appoint an appropriate responsible person

Oman VAT solutions for nonresident businesses

Two obvious challenges are apparent for foreign businesses operating in Oman. Firstly, as there is no threshold, nonresident businesses have an automatic obligation to register for VAT. And secondly, nonresident businesses will need to appoint someone resident in Oman as their responsible person for VAT.

Vatglobal specialises in global VAT compliance. We’ll make it easy for you to register in Oman, and anywhere else you have a VAT obligation. And we’ll ensure you are always 100% VAT compliant.

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