The Sultanate of Oman introduced a VAT regime (including executive regulations) as from 16 April 2021. This was followed by a detailed VAT return filing guide published on 29 June by the Oman tax authorities, as well as a checklist to be uploaded with the VAT return when a taxpayer is claiming an input tax credit refund.
The first VAT return for the period 16 April to 30 June 2021 was due on 30 July 2021. Although some businesses struggled to meet the deadline, they did file returns and pay VAT as the Oman tax authorities did not allow any extensions. A VAT return filed on or after 31 July 2021 is automatically subject to a 1% additional tax per month of delay and a discretionary penalty that can go up to OMR 5,000.
VAT registration in Oman is mandatory for a business with annual supplies (i.e., standard-rated supplies, zero-rated supplies and supplies subject to the reverse charge) of at least OMR 38,500. As outlined in our article in the March 2021 issue of Indirect Tax News, registration for VAT was phased in, depending on the amount of the business’ annual supplies. Businesses with annual supplies exceeding OMR 1 million were required to register by 16 April 2021 and those with annual supplies between OMR 500,000 and OMR 1 million were required to register by 1 July 2021. Two groups of taxpayers still must register:
Nonresident businesses must register for VAT purposes if they provide taxable supplies in Oman mainly to unregistered recipients, irrespective of the registration threshold limit. Nonresidents can appoint a local representative.
Resident businesses with annual supplies exceeding OMR 19,250 may voluntarily register for VAT purposes at any time.
As VAT in Oman is still at a nascent stage and evolving, the authorities have been providing updates: