How Oman VAT Law will impact different sectors of the Economy?
To shed light on how VAT will be enacted in the country, and its effect on business, economic sectors, and people, details have been provided by Oman’s Government Communications Centre. The application of VAT will have a positive impact on economic and social development and the international competitiveness levels of the Sultanate while strengthening its financial standing, which will help contribute to building a sustainable economy. The tax collected will provide additional financial resources for the state that will enable it to improve public services and support the continued development of infrastructure in the future.
Oman VAT Law impact on Education, Food and Healthcare
The sectors of healthcare, insurance, and goods and services related to medical care (drugs and equipment), will not be covered by Oman value-added tax Law. Basic food commodities/foodstuff and goods and services pertaining to education, and items used by people with disabilities along with the import of supplies for charitable organizations are all exempt from tax.
Effect of Oman VAT on Real Estate Sector
According to Oman VAT Law, there will be no VAT added to sales deals involving residential real estate, vacant, and undeveloped land.
Business Sector under Oman VAT Law
Oman’s business sector will serve as a collector of tax in the sultanate and it will bear the cost of imposing the VAT, collecting it, claiming it, and complying with tax obligations under the law and regulations.
It is mandatory to register for VAT and maintain an effective accounting and billing system along with managing accurate accounting records relating to value-added tax. The regulations also require VAT to be stated in business establishments’ bills.
Impact of VAT on Consumers in Oman
Registered establishments are to impose this tax on the taxable goods and services they provide. Therefore, the tax will be borne by the consumer who receives these goods or services, and the basic tax rate of five percent will be applied to most goods and services.
Here is how VAT is calculated. If the price of a product you want to buy is OMR5 without tax, then the Value Added Tax that will be charged is equal to 250 baisas (5 into 5% = 0.250 OMR). This means that the final price of the product is OMR 5.250 with tax.
Oman VAT effects Investment and Transportation in Oman
Value Added Tax will also not be imposed on investments in gold, silver, and platinum, as well as companies involved in supplying or operating vehicles that transport goods and passengers, by land, sea, or air.
Companies involved in the supply of rescue and emergency service aircraft and other vehicles, as well as those operating in supplying crude oil and its derivatives, and natural gas, will also not need to pay VAT.
Tourism Sector under Oman VAT Law
Visitors and tourists will be responsible for VAT on their taxable purchases and will be entitled to a refund of the tax according to certain conditions that will be specified in the regulations, including the type of goods eligible for refunds, and the minimum refundable value for them.
Financial Services Sector
All financial services are exempted under Oman VAT Law.
In order to sort out all VAT related issues and inquires, please read in detail our Oman VAT consultation services and contact us at firstname.lastname@example.org
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