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What are VAT Registration Deadlines in Oman?

VAT in Oman
Preparing for Oman's phased VAT registration

The Oman Tax Authority has issued VAT registration process guidance in January 2021.  It was the first guidance following the issuance of the Oman VAT law in October 2020. The guidance document aims to support businesses in assessing their VAT registration requirements and complying with them on a timely basis before 16 April 2021.

Oman issued a phased approach to VAT registration that is good for small and domestic businesses. It helps them get time to familiarize themselves with the Oman VAT legislation, understand how VAT will impact their business, and sufficiently prepare to be compliant.

What are the deadlines for phased registration?

VAT ProcessMandatory Registration

A person who is required to register must apply for registration with the Oman Tax Authority within the dates specified in the Tax Authority’s Decision number (3/2021), as shown in the table below:

Phase

Taxable Turnover (OMR)

Mandatory Registration Timelines VAT Effective Date
Phase 1 Above 1 million 1-Feb-2021 to 15–Mar-2021 16 April 2021
Phase 2 From 500,000 upto 1 million 1-Apr-2021 to 31-May-2021 01 July 2021
Phase 3 From 250,000 and upto 499,999 1-Jul-2021 to 31-Aug-2021 01 Oct 2021
Phase 4 From 38,500 to 249,999 1-Dec-2021 to 28-Feb-2022 01 Apr 2022
Other Non-residents Non-residents doing business in Oman are required to register

Voluntary Registration

Any person that has annual taxable turnover or expenses over OMR 19,250 can apply for registration. The minute taxable turnover goes above the Mandatory Threshold at the different monetary limits makes the registration compulsory.

How to prepare for VAT in Oman?

Oman Tax Authority has issued preparation for the implementation of VAT in Oman guidance in January 2021. The guide persuades businesses to act early by appointing a specialist team including key personnel from across all core business divisions to be better prepared. The team should be encouraged to meet regularly to track the progress of preparations. The group of specialists aims to make everyone in the business familiar with the VAT legislation. It also identifies any areas of ambiguity early for clarification.

The Tax Authority in Oman encourages taxable persons to make a plan for their VAT implementation. The following should be done to ensure a successful implementation of VAT in Oman, including:

Identifying the financial impact of VAT on all the business’s transactions, including whether those transactions should be treated as standard-rated, zero-rated, or exempt;

  • Assessing the impact of VAT on pricing;
  • Developing a blueprint of all activities required to be ready for VAT;
  • Holding VAT awareness programs for employees and other stakeholders;
  • Determining and implementing any required changes to IT systems that include VAT invoices, and accounting system;
  • Identifying any opportunities to take benefits in VAT law;
  • Seeking sufficient support from consultants such as VAT advisers, ERP vendors, and lawyers; and
  • Ensuring the business can generate adequate VAT reports to prepare periodic VAT returns.

The guidance provided highlights the importance of testing any new systems, processes, and procedures before the date of implementation, and incorporating monitoring and internal auditing to ensure continued compliance.

The guide is brief and does not go into the minute details of full VAT implementation. It does indicate that Oman expects businesses to undertake sufficient planning to be compliant on a timely basis with the VAT law. Businesses should be aware of the consequences of non-compliance with norms of the transition period for VAT incorporation.