Within 2024, the Sultanate of Oman Tax Authority aims to implement an electronic invoicing system for VAT. The e-invoicing system will be implemented easily in April 2024 and will become required for big organizations operating in the country in October 2024. Oman may use a Continuous Transaction Control (CTC) e-invoicing model, even if an official statement outlining the elements of the system hasn’t been released yet. With this model, the tax authority may validate invoices in real-time.
Following other Gulf nations, Oman implemented its Value Added Tax (VAT) system in April 2021. Only Saudi Arabia has implemented a mandated e-invoice regime since 2021. Similar regimes are anticipated to be introduced by Bahrain and the United Arab Emirates.
Under decision No. 456 of 2022, which was issued to update the Value Added Tax (VAT) Executive Regulations, the tax authorities in Oman specified electronic tax invoices. A tax invoice produced in a structured style using electronic methods is what is referred to as an electronic tax invoice. It contains the bare minimum of the information required by the VAT Executive Regulations and also must adhere to any other guidelines that the tax authority may specify.
To impose penalties ranging from OMR 500 to OMR 5,000, the authority revised Article 202 of the “VAT Regulations.” Additionally, it is informed that failing to submit an electronic tax invoice carries the same penalty.
VAT compliance and e-invoicing
After introducing VAT in 2021, the Sultanate of Oman Tax Authority gradually enforced the need for VAT registration, starting with big businesses. Electronic invoicing is being made mandatory in many nations worldwide. The Sultanate believes that electronic invoicing also facilitates the detection of VAT fraud and avoidance. Electronic invoicing aids the government in complying with tax laws more effectively and offers openness in business dealings. Additionally, electronic invoicing maintains easier consumer transactions and greater accuracy.
Once the e-invoicing project is launched, VAT-registered taxpayers in Oman must make the appropriate changes to their business processes and compliance procedures to match it. Thus, before the laws take effect, companies in Oman should think about putting the newest compliance technology into place to ensure a smooth transition to e-invoicing.
Getting ready for e-invoicing
To prepare for the process adjustments needed for a seamless shift to e-invoicing, businesses in Oman will need to keep an eye on how e-invoicing is being implemented in other GCC nations. The Sultanate of Oman is anticipated to make an announcement shortly regarding the e-invoicing initiative’s scope and implementation timelines.
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