Oman Guide: New executive decisions for VAT in Oman

The Oman Tax Authority on January 6, 2021, issued three executive decisions of the implementation of the Value Added Tax (VAT), which will be enforced by April 16, 2021. The decisions are related to the determination of the minimum volume of sales required for compulsory registration with the Tax Authority, the deadline for registration to the Tax Authority, and lists of the foods exempted from the VAT in Oman.

First Decision

The decision specifies the volume of sales for registration that are:- 

• Compulsory Registration in Oman: If the taxpayer’s annual sales are OMR 38,500 or more or expected to reach this ceiling limit. 
• Voluntary Registration in Oman: If the taxpayer’s annual sales are OMR 19,250 or more or expected to reach this ceiling limit.

Determination of ceilings for compulsory and voluntary registration comes within the context of the provisions of the GCC Unified VAT Agreement, which Oman signed in November 2016.

Second Decision

The decision fixes deadlines for taxpayers’ registration to the VAT in Oman at the Tax Authority depending on the volume of their annual sales. The aim is to grant SMEs sufficient time to prepare and adjust their systems of accounting and invoicing to meet the requirements of the Oman VAT Law.

• Taxpayers' annual sales cross or are expected to cross OMR 1 million: Registration with the Tax Authority between February 1, 2021, and March 15, 2021. The VAT becomes applicable from April 16, 2021.
• Taxpayers' annual sales cross or are expected to cross OMR 500,000: Registration with the Tax Authority between April 1, 2021, and May 31, 2021. The VAT becomes applicable from July 1, 2021.
• Taxpayers' annual sales cross or are expected to cross OMR 250,000: Registration with the Tax Authority between July 1, 2021, and August 31, 2021. The VAT becomes applicable from October 1, 2021.
• Taxpayers' annual sales cross or are expected to cross OMR 38,500: Registration with the Tax Authority between December 1, 2021, and February 15, 2022. The VAT becomes applicable from April 1, 2022.

The decision gives taxpayers a right for voluntary registration with the Tax Authority from February 1, 2021, if the value of their supplies crosses or is expected to cross OMR 19,250.

Third Decision

The decision specified the type of foods exempted from the VAT. The list consists of 94 food items to be exempted from the VAT in Oman. It includes meats, fish, poultry, milk products, fresh eggs, vegetables, fruits, coffee, tea, cardamom, grains, olive oil, sugar, child foods, bread, packed water, and common salt.

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