What is VAT?
Value Added Tax (VAT) is a tax on the consumption or use of goods and services levied at each point of supply. It is a form of indirect tax which is adopted by more than 180 countries in the globe.
VAT in Oman is effective from 16th April 2021. The rate of tax in Oman is 5% in line with the GCC VAT agreement and there are categories of goods and services classified as Zero-rated and exempted as well.
Subject to the conditions mentioned in the Executive Regulations, the following supplies are zero-rated as per the Oman VAT Law:
Who Can Register for VAT in OMAN?
Registration of business entities for VAT depends on the income generated by the business. The slabs for entities that will become responsible for VAT Registration are as follows:
Businesses having taxable supplies & imports above OMR 38500
Mandated to apply for VAT registration
Businesses having taxable supplies & imports between AED 19250 & 38500
Can voluntarily apply for VAT registration
Businesses having taxable supplies & imports less than AED 19250
Not required to apply for VAT registration
Most important reasons that define why VAT registration is considered as an essential part are:
- It boosts the business profile
- It averts financial penalties
- One may claim for VAT refunds
- It helps to grab a mass market
VAT Registration Process in OMAN
To initiate VAT registration in OMAN, one must fill the VAT Registration form online and submit the essential documents required along with the form in order to attain VAT Number. The entire registration process takes place on an online platform. Let’s have a look at the documents.
Documents for VAT Registration in OMAN
The documents required for VAT Registration in OMAN include:
- Trade license
- Passport copy & Identification document/card of the business owner
- Memorandum of association or memorandum of agreement (also known as MOA)
- Business official address & Business contact details.
- Bank account details
- Statement of income for the past 12 months
- Legal entity type
- Activities performed
A value added tax certificate (or VAT certificate) is a document that certifies that a business is registered under the VAT law. A VAT certificate is a proof of business entities being registered under the Oman tax law and assures that the business entity is known by the government of Oman.
What does a VAT Certificate contain?The VAT certificate usually contains the following:
- VAT registration Number
- Date when the business was registered under VAT
- Date of issuance
- Business registered address
- First VAT return period
- VAT return due date
The online registration for VAT in OMAN can be done through the VAT registration portal available on the website of www.tax.oman.gov.om .The steps to be considered while doing an online registration involves filing:
- Details about the Applicant
- Contact Details
- Banking Details
- Business Relationship (optional)
- About the VAT Registration
- Review and Submit
Once the application is submitted, the STA will review the information and documents submitted, and if everything is found to be satisfactory, the application will be approved, and a Tax Identification Number (TIN) will be allotted.
Any company that misses the VAT Registration Number cutoff date or fails to complete the VAT registration process under the deadline set by the Federal Tax Authority must undergo a fine of OMR 2000.
VAT Group Registration is a tax registration process where two or more business parties club together to form a group, with a motive of paying a single tax. By registering under the Group VAT scheme, the businesses under consideration get a single VAT number and can file a single return. A VAT group allows people and entities that are closely linked financially, economically and organizationally to operate as a single VAT person.
The following prerequisites need to be fulfilled by the concerned parties to form a VAT group:
Each party should have a place of establishment or a fixed establishment in OMAN [‘place of establishment’ implies a location where a business is legally established in the OMAN or where significant management decisions are taken and central management functions are conducted; ‘fixed establishment’ implies a location where a person conducts one’s business regularly or permanently, including branches].
The concerned parties should be related at economic, financial or regulatory level.
One or more persons conducting business in the VAT group shall control the others.
Responsible Person in VAT Oman is any person related to the Taxable Person and represents him in executing the obligations. The Chairman determines the credentials for the Responsible Person in VAT Oman. The Responsible Person can leave Oman for 90 days or less during the Tax Year. If the person wants to stay outside for more than 90 days it can be done by notification to the Authority. The Authority has to agree to appoint another Responsible Person during the entire period of his absence. The duties of the responsible person mentioned in Article 76 of VAT Oman law.
VAT Registration and Implementation Effective Date
|Licensee having Annual Taxable Turnover FROM||Licensee having Annual Taxable Turnover UPTO||Registration Timelines||Effective Date of Implementation|
|1,000,000.00||(No Maximum Limit)||01st February 2021 to 15th March 2021||16th April 2021|
|500,000.00||999,999||01st April 2021 to 31st May 2021||01st July 2021|
|250,000.00||499,999||01st July 2021 to 31st May 2021||01st October 2021|
|38,500.00||249,999||01st December 2021 to 28th February 2021||01st April 2022|
GSPU has been a prominent player in dealing with the accounting and taxation services for business entities, be it a startup or an established company. Understanding the importance and need for VAT Services for new and existing business entities, we deliver a wide range of VAT services. Few of these are:
- VAT registration and VAT Group registration
- VAT compliance and control
- VAT filing and payment
- Data record and management
GSPU, since its inception, has been a prominent player in being a business consultant dealing with accounting, taxation services for business entities at a global level. Our team of VAT experts will help your business to file the VAT process and frame it in the most beneficial way to reduce your cash outflow during tax payment stage. To initiate the process, feel free to contact us. We would be happy to assist you and sort your queries.